Leggett & Platt Rejects Unsolicited Bid Amid Challenging Financial Year

The board of Leggett & Platt has formally turned down an unsolicited acquisition proposal from Somnigroup International, valuing the company at $12.00 per share. This decision comes as the diversified manufacturer concludes a difficult fiscal year marked by significant revenue declines, raising questions about its independent path forward.

Financial results for the fourth quarter and full year 2025, released after the U.S. market close yesterday, underscore the ongoing challenges. Q4 revenue fell 11% year-over-year to $939 million. For the entire year, sales decreased by 7% to $4.05 billion. A notable bright spot was the company's adjusted earnings per share (EPS) of $0.22 for the quarter, which met consensus analyst estimates.

Debt Reduction and Restructuring Efforts

Management highlighted a strengthened financial position, with full-year 2025 operating cash flow rising to $338 million, an increase of $33 million from the prior year. These funds were deployed strategically to reduce leverage. The net debt-to-EBITDA ratio was lowered to 2.4x, moving the firm closer to its long-term target.

Furthermore, the company confirmed on a conference call that a major restructuring initiative launched in early 2024 is now substantially complete. This program was designed to align the cost structure with a more demanding market environment.

Should investors sell immediately? Or is it worth buying Leggett & Platt?

• Q4 2025 Revenue: $939 million (-11%)
• Full-Year 2025 Adjusted EPS: $1.05
• 2025 Operating Cash Flow: $338 million
• Rejected Takeover Bid: $12.00 per share
• 2026 Revenue Guidance: $3.8 – $4.0 billion

Board Deems Offer Inadequate

In parallel with the earnings release, the company disclosed the unsolicited bid from Somnigroup. Leggett & Platt's board unanimously rejected the offer, stating clearly that the proposed price fails to reflect the inherent value of the corporation and is insufficient from a shareholder perspective.

Cautious Outlook for 2026

Looking ahead, the company's guidance for the current fiscal year remains cautious. Management anticipates 2026 revenue in a range of $3.8 to $4.0 billion, suggesting continued stagnation or a slight dip compared to 2025. Adjusted EPS is projected to land between $1.00 and $1.20.

The coming months will be critical. Market observers will watch to see if Somnigroup returns with a revised offer, and whether Leggett & Platt's completed restructuring can successfully stabilize operational margins. Hitting the provided 2026 guidance ranges is now viewed as a key test for market confidence in the company's standalone strategy.