WALTHAM, Mass. (AP) -- Shares of Steinway Musical Instruments Inc. fell to an annual low Thursday after the company said it has decided not to sell its band instrument business.
THE SPARK: The instrument maker said late Wednesday it has completed evaluation of strategic alternatives and has concluded that selling the band instrument division was not in the best interest of its shareholders. It is still negotiating the potential sale of its interest in Steinway Hall building in New York City.
THE BIG PICTURE: Steinway announced in July 2011 that it had received an unsolicited offer for the band instrument unit. In January Steinway said it reached a deal in principle to sell the business to a group of investors including former CEO Dana Messina and Conn-Selmer President John Stoner for undisclosed terms.
The company, based in Waltham, Mass., said it considered options including a sale of the band instrument unit and a sale of the entire company as part of its strategic review.
Over the first three quarters of 2012, revenue from Steinway's piano business fell 2 percent to $145.5 million while revenue from the band division grew 5 percent to $107.5 million. The piano business is more profitable.
SHARE ACTION: Steinway Musical Instruments stock lost $1.30, or 5.8 percent, to $21.22 in midday trading. The shares are down 13.3 percent since Sept. 7, and earlier Thursday they reached a 52-week low of $20.61.