Jefferies notes that in a press release this morning, Somnigroup (SGI) announced their offer to acquire supplier Leggett & Platt in an all-stock transaction. With a challenging demand backdrop for U.S. produced bedding, Somnigroup is “playing offense” ahead of a more sustained recovery in the category. Long-term, the firm believes this transaction would provide the company’s brand umbrella with greater sourcing transparency and cost efficiencies in its supply chain. Jefferies has a Hold rating on Somnigroup with a price target of $86 on the shares.
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