Steinway Musical Instruments Inc., owner of the 160-year-old piano maker, agreed to be bought by private-equity firm Kohlberg & Co. for about $438 million.

The deal includes a 45-day period in which Waltham, Massachusetts-based Steinway can solicit other proposals, according to a statement yesterday. The stock, whose LVB symbol was inspired by Ludwig von Beethoven, rose 16 percent to $35.28 at the close in New York, above the $35-a-share offer, signaling investors are anticipating other bidders.

“As the economy recovers, they are well positioned for growth,” Arnold Ursaner, an analyst for CJS Securities in White Plains, New York, said in an interview. A rebound in the U.S. housing market, especially luxury homes, and improving consumer confidence bode well for piano sales, he said.

Steinway agreed be taken private following 17 years as a publicly traded company, three days after closing the $46.3 million sale of its stake in the famed Steinway Hall building on West 57th Street in New York City, which houses its flagship retail showroom. The piano maker that gave the company its name was founded in 1853 by German immigrant Henry Engelhard Steinway in a Manhattan loft on Varick Street, and over the following decades became a brand recognized worldwide.

The company, whose pianos take almost a year to create, was bought by saxophone maker Selmer Industries in 1995 and taken public the following year by investment bankers Kyle Kirkland and Dana Messina, then chairman and chief executive officer, respectively. They expanded through acquisitions and faced declines in sales during the recession. In 2011 the executives made a bid to buy the band division -- which includes Bach Stradivarius trumpets and C.G. Conn French horns.

Piano Sales

Steinway turned down the offer and ended a review for strategic alternatives in December. Chief Executive Officer Michael Sweeney has been working to increase production of Steinway’s grand pianos, which, combined with Boston & Essex pianos, accounted for 61 percent of the company’s revenue last year. Sales in the piano operations rose 2.9 percent in the first quarter.

The offer is 15 percent higher than Steinway’s closing price on June 28, when the company had a market valuation of $393.7 million. In 2012, Steinway’s revenue increased 2.2 percent to $353.7 million as net income jumped to $13.5 million from $1.63 million.

Not Adequate

At least one investor didn’t like the offer: Bradd Kern, a portfolio manager for Irvine, California-based Armored Wolf LLC, said the company is poised for further growth.

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