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BALDWIN PIANO & ORGAN COMPANY
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(Name of Registrant as Specified In Its Charter)
KENNETH W. PAVIS, SR./BOLERO INVESTMENT GROUP, L.P.
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BOLERO INVESTMENT GROUP
Ingraham Building 1101 East Balboa Blvd.
25 SE 2nd Avenue, Suite 720 Newport Beach, CA 92661-1313
Miami, Florida 33131 (714) 675-3850
(305) 371-5200
BALDWIN RESPONDS TO SHAREHOLDER PROPOSAL TO HIRE
INVESTMENT BANKER
PAVIA URGES BOARD TO EVALUATE ALL ALTERNATIVES, INCLUDING A SALE OF THE COMPANY
BOLERO TO CONTINUE TO PURSUE ELECTION OF NOMINEES TO BALDWIN BOARD
Kenneth W. Pavia, General Partner of Bolero Investment Group, L.P.
announced today that he is pleased with Baldwin Piano & Organ Company's decision
to hire the investment banking firm of Lehman Brothers to explore all
alternatives for enhancing shareholder value, including a possible merger of
Baldwin.
"This is a victory for all Baldwin shareholders," said Mr. Pavia.
"The Board of Directors of Baldwin has taken an important step in hiring Lehman
Brothers. It is now incumbent upon the Board to work promptly and effectively
with Lehman Brothers to develop and implement a strategy that will increase
shareholder value. Although Lehman's directive does not encompass all of the
areas with respect to which the Board should be seeking help, I believe that if
handled properly this could be an important step toward enhancing shareholder
values.
"Baldwin claims to have complied with the substance of my proposal.
For the sake of all Baldwin shareholders, I am hopeful that the company complies
with its spirit," added Mr. Pavia.
In another action, the Baldwin Board amended its Bylaws to make it
more difficult for shareholders to nominate directors or bring other matters
before an annual meeting of shareholders.
"In adopting this amendment, which I would term as an 'anti-
shareholder' provision, the Baldwin Board was well aware that Bolero had
previously announced its intention to nominate a slate of directors at Baldwin's
1997 meeting," said Mr. Pavia. "I am disappointed that the Baldwin Board would
resort to this type of gamesmanship, instead of focusing on the important
business and financial challenges that Baldwin faces."
"The new Baldwin Bylaw makes it more difficult for shareholders to
exercise their fundamental rights to nominate directors and bring other actions
before meetings of their fellow shareholders. It appears that even though Bolero
notified Baldwin of its intention to make its nominations more than three months
ago, Bolero will have to overcome a series of artificial, procedural obstacles
in order to give shareholders a choice at the annual meeting," added Mr. Pavia.
Mr. Pavia noted that the Bylaw provision is one-sided in that it does not appear
to apply to the Company's nominees."
Mr. Pavia and Bolero Investment Group currently hold 8.2 % of Baldwin
Common Stock.
Proposal to Hire Investment Banker
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On September 13, 1996, Mr. Pavia publicly urged Baldwin to hire a
nationally recognized investment banking firm to help turn around its lackluster
performance. Mr. Pavia formally notified Baldwin of his intention to present a
proposal at Baldwin's 1997 annual shareholders' meeting, requesting Baldwin to
hire an investment banking firm to explore all strategic alternatives to enhance
shareholder value, including the possible sale, merger or business combination
involving the company. Until this past week, Mr. Pavia had not received a
response from Baldwin to his proposal.
On February 27, 1997, Baldwin announced that it had hired Lehman
Brothers. That same day, in a letter to the Securities and Exchange Commission,
Baldwin's counsel represented that "Lehman has been specifically directed to (i)
assess the value of Baldwin's non-core businesses and review strategies for such
businesses; (ii) develop appropriate financial and capital structure targets and
ratios, including evaluating potential sources of additional liquidity; (iii)
review current sources and potential uses of Baldwin's cash flow; and (iv)
review strategic opportunities available to Baldwin, including acquisitions,
mergers or strategic alliances."
After the Board retained Lehman Brothers, Baldwin submitted a letter
to the Securities and Exchange Commission seeking to exclude the Pavia proposal,
contending that it had already been substantially implemented. Mr. Pavia stated
that counsel is reviewing Baldwin's submission to the SEC.
Nominations to Baldwin Board
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Bolero Investment previously announced that it intends to propose five
nominees to stand for election as members of the Baldwin Board. Those nominees
are:
1) Honorable John West
2) Edward McDonnell
3) Peter Cooper
4) David Harmon
5) Dr. Robert Lippert
Mr. Pavia stated that these nominees bring a wealth of experience,
specialized knowledge and enthusiasm that will be essential to Baldwin and are
being proposed based on Bolero's reasoned belief that Baldwin would prosper
under new board leadership. If she consents, Bolero also would nominate
Baldwin's current Chairman and CEO.
