Shares of US furniture and bedding manufacturer Leggett & Platt rose sharply on Monday by almost 15% after Somnigroup International said it had submitted an offer to acquire the company in an all-stock deal valued at $1.63 billion.
The bid, disclosed in a letter sent to Leggett & Platt’s board, proposes that shareholders receive Somnigroup stock worth $12 for each Leggett & Platt share.
The valuation represents a 17% premium to the Missouri-based company’s last closing price.
Somnigroup said that while it has been working with Leggett & Platt as a supplier for years, it had not entered into prior negotiations before approaching the board on November 30.
The mattress group, whose portfolio includes brands such as Tempur-Pedic, Sealy, Stearns & Foster and Sleepy’s, said the acquisition would strengthen supply chain integration while preserving Leggett & Platt’s operational structure.
Board begins review of unsolicited proposal
Leggett & Platt, which confirmed receiving the non-binding offer, said its board will evaluate the proposal with guidance from independent legal and financial advisers before determining how to proceed.
The company has been asked to provide a response by December 22, leaving several weeks of deliberation ahead.
In a statement, the company said it will assess the bid carefully in the context of long-term value creation, signalling that no decision has yet been made.
Somnigroup, meanwhile, emphasised that its preference is for Leggett & Platt to continue operating independently within its umbrella of bedding brands.
It noted that most employees and the existing management team would be retained, and that the company would maintain a significant presence in Carthage, Missouri.
Somnigroup Chief Executive Scott Thompson underscored the long-standing customer-supplier relationship between the two companies, arguing that a merger could secure stable volumes for Leggett & Platt while lowering financing costs and providing strategic support.
Recent earnings and market reaction
The bid comes just weeks after Leggett & Platt reported third-quarter revenue of $1.04 billion, down 5.9% from a year earlier but marginally ahead of analysts’ estimates.
The company also posted stronger-than-expected adjusted operating income, though bedding revenue fell short of expectations.
CEO Karl Glassman described the quarter as solid, given economic pressures, noting that the company completed the sale of its aerospace unit to sharpen its focus on core segments.
Despite delivering the slowest revenue growth in its peer group and issuing weaker full-year guidance, Leggett & Platt shares have climbed since earnings, suggesting investors may view the business as undervalued or positioned for strategic interest.
Monday’s surge adds momentum to that trend, with markets now watching closely to see whether negotiations progress or if Leggett & Platt seeks alternative paths to bolster value.
The coming weeks, leading up to the December 22 deadline, may prove decisive in determining whether one of the oldest names in US bedding manufacturing is absorbed into a global mattress conglomerate or remains independent amid heightened acquisition interest.
The post Leggett & Platt shares rally after Somnigroup makes $1.6B all-stock bid appeared first on Invezz
