CBS Inc. said Friday that it has agreed in principle to sell its troubled Fender Musical Instruments unit--whose electric guitars have been a mainstay of today's popular music--to outside investors and Fender employees, led by Fender President William C. Schultz. The amount of the cash transaction was undisclosed.
Schultz, 58, who will become chairman and chief executive of Fullerton-based Fender, said the sale is expected to be completed by March 4. Many of the investors, he said, are key management officials at Fender. Other longtime Fender employees, he added, will also be given an opportunity to purchase stock.
The proposed sale puts to rest speculation that Fender, a pioneer in modern electric music that has suffered in recent years from foreign competition and a shrinking guitar market, might be sold to a Japanese company or go out of business.
"This is an opportunity to keep a very viable and legendary name alive in the industry," said Schultz, whom CBS recruited from Yamaha in 1981 to try to turn Fender around.