Shares in the world’s largest bed company Somnigroup and component giant Leggett & Platt have both risen after the Sealy and Dreams owner proposed a $1.6bn takeover.
The Tempurdedic parent has suggested paying with shares, making investor reaction vital. Somnigroup shares rose 1.8% after it revealed the non-binding offer, while Leggett & Platt’s rose 14% to $11.94 – just short of the $12 a share Somnigroup says it will pay.
Somnigroup says Leggett & Plat’s share price has not been at or above $12 for a year and its shareholders would be able to share in a combined group’s future performance.
Most employees and the existing management team would be retained, with a deal secure stable volumes for Leggett & Platt while lowering financing costs and providing strategic support, it argues.
Leggett & Platt says it will consider the unsolicited offer, which comes a few weeks after the supplier reported third-quarter revenue of $1.04bn, 5.9% lower but marginally ahead of analysts’ estimates and saw stronger-than-expected adjusted operating income, though bed sector performance was below expectations.
