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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(AMENDMENT NO. 10)
Under the Securities Exchange Act of 1934
Baldwin Piano & Organ Company
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(Name of issuer)
Common Stock
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(Title of class of securities)
058246109
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(CUSIP number)
Kenneth W. Pavia, Sr. Charles Powers
Bolero Investment Group, L.P. Florence Partners Inc.
1101 E. Balboa Boulevard 2419 Sumter St. Ext.
Newport Beach, CA 92661-1313 Florence, SC 29502
(714) 675-3850 (803) 660-1941
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(Name, address and telephone number of person
authorized to receive notices and communications)
COPY TO:
Scott R. Haber
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111-2562
(415) 391-0600
June 12, 1997
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
Page 1 of 7 Pages
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This Amendment No. 10 to Schedule 13D is being filed on behalf of
the undersigned Reporting Persons to amend the Schedule 13D filed with the
Securities and Exchange Commission (the "Commission") on July 18, 1996, as
amended (as amended, the "Schedule 13D"), relating to shares of common stock,
par value $.01 per share (the "Shares"), of Baldwin Piano & Organ Company, a
Delaware corporation (the "Company"). Unless otherwise indicated, all
capitalized terms used herein but not defined herein shall have the same
meanings as set forth in the Schedule 13D.
Item 4. Purpose of Transaction.
Item 4 to the Schedule 13D is hereby amended, in pertinent part,
as follows:
Following the Annual Meeting of Stockholders of the Company on
June 12, 1997, Bolero issued a letter to the Company's shareholders, which
letter is filed as Exhibit 2 and is incorporated by reference herein.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Joint Filing Agreement (incorporated by reference to Amendment
No. 6 to Schedule 13D).
Exhibit 2 Letter dated June 12, 1997.
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SIGNATURE
After reasonable inquiry and to the best of each of the
undersigned's knowledge and belief, each of the undersigned certifies that the
information set forth in this statement is true, complete and correct.
Dated: June 12, 1997
Bolero Investment Group, L.P.
By: /s/ Kenneth W. Pavia, Sr.
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Name: Kenneth W. Pavia, Sr.
Its: General Partner
/s/ Kenneth W. Pavia, Sr.
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Kenneth W. Pavia, Sr.
FHI, Inc.
By: /s/ Kenneth W. Pavia, Sr.
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Name: Kenneth W. Pavia, Sr.
Its: President
Florence Partners Inc.
By: /s/ Charles Powers
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Name: Charles Powers
Its: President
/s/ Charles Powers
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Charles Powers
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EXHIBIT INDEX
Exhibit 1 Joint Filing Agreement (incorporated by reference to Amendment
No. 6 to Schedule 13D).
Exhibit 2 Letter dated June 12, 1997.
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Exhibit 2
BOLERO INVESTMENT GROUP, L.P.
INGRAHAM BUILDING 1101 EAST BALBOA BLVD.
25 S.E. 2ND AVE., STE.720 NEWPORT BEACH, CA 92661-1313
MIAMI, FL 33131 (714) 675-3850
(305) 371-5200 (714) 673-0434 (FAX)
(305) 371-5226 (FAX)
June 12, 1997
FELLOW SHAREHOLDERS:
In the hope that we are about to embark on a new era of success, I felt it would
be beneficial to explore Baldwin Piano & Organ Co.'s immediate past and
anticipate its future direction. I began acquiring stock in Baldwin in 1994.
Then, as now, the company was underperforming and its stock price was
significantly below book value. However, I believed that assets such as its
brand names, a one hundred year old finance company, and its quality products
made Baldwin an attractive investment opportunity with significant potential for
increased shareholder value.
Subsequently, the company retained the services of Ms. Karen Hendricks. While
her previous experience was unrelated to the manufacturing of pianos, we agreed
that her retention was a significant, positive move by the company. As we
continued to increase our position in the company, Baldwin unfortunately
continued to suffer through stagnant sales, earnings and undervalued stock
price. In July of 1996, the Bolero partnership announced its 13D position and
attempted to engage management in an open and frank discussion of all the issues
surrounding the company. In addition, as we were presumably laboring under the
same goal as management, that of improved company performance, we offered the
aid and assistance of the partnership in achieving that goal. Management
declined to meet with the partnership or to discuss our offer of assistance.
Bolero's reaction to the aforementioned was immediate. As a substantial
shareholder of the company, it was our responsibility to remind management that
the true owners of the company are its shareholders. Proper notions of corporate
governance and managerial receptiveness to shareholders was completely lacking
within the corporate culture of Baldwin. The issue seemed simple: Who are the
owners of the company and what responsibility, if any, does the Board and
management have to its shareholders? Faced with no opportunity to explore
alternatives to the manner in which the company had been managed over the last
three years, the partnership proceeded to accomplish the following:
1) Propose that management retain an investment banker to explore all
alternatives to enhance the company's value, including a possible sale, merger
or business combination;
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2) Forward a variety of issues and ideas identified by Bolero which, if
implemented, could have had the net effect of producing the desired goals of
improved company performance; and
3) Propose a slate of directors whose credentials exhibited a wealth of
experience and knowledge particularly suited to overseeing the turnaround of the
company.
We believed it was in the best interests of all shareholders to have a Board
that would exhibit the appropriate amount of shareholder sensitivity necessary
to address the challenges facing the company.
Throughout this period of Bolero activism, the company continued to refuse to
meet with the partnership or to discuss the problems facing the company.
Meanwhile, the company's report for the quarter ended September 30, 1996,
demonstrated flat sales and earnings. The primary reason for the dismal report
was the accumulation of a significant amount of inventory, coincidently one of
the issues raised by the partnership. Thereafter, the company announced the
reduction of its workforce in two press releases. Again, these announcements
addressed the observation encompassed in our previous letters to management,
that while sales and earnings continued to decline, administrative expense had
remained constant.
In March of 1997 the company announced, along with disappointing results for
1996, the retention of Lehman Brothers. It was our hope that this engagement
would not only follow the letter of our proposal, but also its spirit.
Subsequently, the company announced the sale of its church organ division. While
not a significant event in the scope of overall company performance, it
nevertheless began to address the concerns of Bolero regarding the viability of
various nonstrategic divisions of the company.
As we approached the annual meeting, the partnership was subjected to a change
in the bylaws as well as other procedural hurdles as we attempted to present our
slate of director nominees to the shareholders. The partnership complied with
the requirements in the hopes of providing a reasonable alternative to
management's position. In April of 1997, the company announced disappointing
results for the quarter ended March 31, 1997. As the shareholder vote
demonstrated, the majority of shareholders have decided to grant the board and
management a reprieve. This decision was arrived at despite the lack of progress
over the last three years; despite the uncanny similarity between the issues
raised by Bolero and management's strategic plan; despite the company's apparent
lack of shareholder sensitivity; and despite an apparent management style that
seems to have been dictated by a reactive approach to the issues being raised by
Bolero.
Currently we find the company at a crossroad in its history. Management has
described a strategic plan in place and the possibility of increased sales,
earnings and stock price in the near future. Despite this strategic plan having
components that are strikingly similar to the partnership's suggestions,
including the recent announcements of the restructuring of the company's finance
arrangement with its dealers, management has been granted one last opportunity
to fulfill the wishes of its shareholders. At issue is the future of the company
as well as that of its Board and management. Faced with the pressure to produce
after all the promises, denials and positions taken by the company, management
has staked its reputation and careers on its ability to generate the results
promised. The shareholders, including
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Bolero, will be ever vigilant of the progress made as well as the promises
broken. It is our hope that Baldwin finally achieves the success it has long
sought.
Much like a dissenting opinion in an appellate decision, Bolero has presented a
reasoned, prudent argument that has been rejected by the majority. In the event
that the majority determines that there is a need to alter the status quo, the
ideas, suggestions, comments and advice offered by the partnership could provide
the foundation for such a change. Currently, the shareholders have spoken and
remanded a decision to management which calls for immediate results. Should
Baldwin proceed on a course which is inconsistent in both letter and spirit to
the aforementioned, the course of conduct should be clear to Baldwin's
shareholders.
The ultimate goal for management and its shareholders is improving company
performance. The Bolero partnership intends to continue to offer a reasoned,
logical perspective in the event management does not comply with its mandate. At
present, we will anxiously await the results of management's plan and look
forward to the culmination of our efforts.
Sincerely,
/s/ Kenneth W. Pavia
Kenneth W. Pavia, G.P.
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