Friday, March 7, 1997
Baldwin asks SEC
to bump dissidents

Company fights pitch for merger, new directors

BY LEAH BETH WARD
The Cincinnati Enquirer

Baldwin Piano & Organ Co. is getting tough with a dissident shareholder group that is seeking to press it into a merger and nominate a new slate of directors.

Baldwin has asked the Securities and Exchange Commission to remove from its upcoming proxy a proposal from Bolero Investment Group that would require the company to hire an investment banker.

Baldwin said its recent decision to hire Lehman Brothers renders Bolero's idea moot. SEC approval is required to omit the proposal from proxy materials.

Also last week, the company informed the SEC that it had changed its bylaws to require more information from stockholders who want to nominate board members.

For example, nominees must disclose any interests considered ''antagonistic'' to or ''competitive'' with the company.

''This is stock language,'' said Art Gormley, an executive with The Dilenschneider Group, Baldwin's public relations firm based in New York.

Three months ago, Bolero, a Newport Beach, Calif., partnership, said it would seek a shareholder vote on its five nominees to the six-member board. Baldwin's annual meeting is set for early next month. Mr. Gormley said the bylaw change does not prevent Bolero's action.

Kenneth W. Pavia, Bolero's general partner, Thursday said Baldwin is ''acting with the arrogance of a Procter & Gamble without the performance to back it up.''

Bolero and Baldwin disagree over whether the company, operating in the mature piano industry, is moving to boost shareholder value. Shares are trading below book value.

Bolero, which owns 8.2 percent of Baldwin, argues that the company needs more ''critical mass.''

Baldwin says its strategic plan to focus on core businesses and take advantage of its financing and electronics units will pay off in the second half of the year.

Mr. Pavia said the bylaw change will require Bolero to ''overcome a series of artificial, procedural obstacles in order to give shareholders a choice at the annual meeting.''

Though Bolero will not proceed with its call for an investment banker, Mr. Pavia said he is not giving up on electing new directors.

Mr. Gormley said Baldwin's board nominees are also subject to the bylaw change, though Mr. Pavia has questioned that.

Baldwin officials were attending a regular board meeting in Florida and were not available to comment.