Leggett & Platt Surges 10.7% on All-Stock Takeover Proposal: Is This the Catalyst for a New Bull Run?

Summary
• Leggett & Platt (LEG) rockets 10.7% to $11.36, trading near its 52-week high of $12.29
• Somnigroup (SGI) proposes $12/share all-stock deal, a 30.3% premium to LEG’s 30-day average
• Options frenzy: 3117 contracts traded on LEG20251219C10, with 243% price change ratio
Leggett & Platt’s shares are surging on the back of a bold all-stock takeover proposal from Somnigroup International. The move has ignited a frenzy in the options market and pushed LEG to its highest level since December 2024. With a 30.3% premium on the table and a 52-week price-to-earnings ratio of just 5.49, the stock is now at a critical inflection point. Traders are scrambling to position for a potential regulatory green light or a counterbid.

Takeover Premium Ignites Short-Term Bullish Momentum
The 10.7% intraday surge in LEG is directly attributable to Somnigroup’s unsolicited all-stock acquisition proposal, which values Leggett & Platt at $12 per share—a 30.3% premium to its 30-day average. The all-stock structure, offering tax-deferred participation in Somnigroup’s growth, has created immediate upside potential for LEG shareholders. The proposal’s emphasis on strategic synergies—such as integrating Leggett’s bedding components with Somnigroup’s retail platforms—has amplified investor optimism. With no financing contingency and regulatory approvals expected to be routine, the market is pricing in a high probability of a successful transaction.

Household Durables Sector Quiet as LEG Shines
Options Playbook: Leveraging Gamma and IV Expansion in LEG’s Volatile Move
• MACD: 0.200 (above signal line 0.046), RSI: 83.1 (overbought), Bollinger Bands: Price at 11.36 (above upper band 10.07)
• 200-day MA: 9.03 (far below current price), 30-day support: 8.72–8.76, 200D support: 9.06–9.14
• Key Resistance: 52W high at $12.29, Key Support: 52W low at $6.475
• Top Options: LEG20251219C12.5 (IV 38.96%, leverage 114.90%, delta 0.186, gamma 0.262) and LEG20260320C12.5 (IV 36.24%, leverage 20.89%, delta 0.383, gamma 0.166)
• Payoff Estimate: At 5% upside (11.93), LEG20251219C12.5 yields $1.93 (155% gain); LEG20260320C12.5 yields $0.38 (30% gain)
• Liquidity Check: LEG20251219C12.5 has 444 volume and $4,132 turnover; LEG20260320C12.5 has 21 volume and $1,153 turnover
• Theta/Gamma Edge: LEG20251219C12.5 decays at -0.009354/day but reacts sharply to price swings (gamma 0.262). LEG20260320C12.5 offers lower decay (-0.004587/day) and moderate gamma (0.166), ideal for a mid-term hold.
Action: Aggressive bulls should prioritize LEG20251219C12.5 for a short-term pop above $12.50. For a longer play, LEG20260320C12.5 balances leverage and time decay. Both contracts benefit from elevated IV and a clear path to the 52-week high.

Backtest Leggett & Platt Stock Performance
Here is the event-study you asked for. Key take-aways 1. Only 3 qualifying 11 %+ daily surges occurred between 2022-01-01 and 2025-12-01, so statistical power is limited. 2. On average, the stock gave up most of the surge quickly: the cumulative excess return (vs. buy-and-hold in the same window) was already -2.9 % after one day and -12.8 % after 30 days. 3. Over the first week the pattern is one-sided: win-rate 0 % during days 3-8 and cumulative under-performance reached roughly -10 %. 4. After the second week the drawdown deepened to ~-16 % before stabilising; no persistent positive drift was observed. 5. With so few observations you should treat the results as indicative only, but evidence so far suggests fading (selling/shorting) large up-days in LEG has paid off. Important modelling notes • Because true intraday high–low data were not available, I approximated an “11 % intraday surge” with a ≥ 11 % close-to-close move. • Events were detected on the close of the surge day; performance was measured from the next session’s open (approximated by next close) out to +30 trading days. • Price series: split- and dividend-adjusted close prices. • No transaction costs or liquidity constraints were applied. Below is an interactive module with the full event-study detail (win-rate, cumulative and average P&L paths, best exit horizon, etc.). Feel free to inspect or download the underlying data for deeper dives.Let me know if you would like to alter the trigger threshold, add a risk-managed trading overlay, or run the same test on other tickers.

Breakout or Bluff? Watch $12.29 and Sector Leader Whirlpool’s Cue
Leggett & Platt’s 10.7% surge hinges on whether Somnigroup’s $12/share offer gains board approval or sparks a bidding war. The stock’s technicals—overbought RSI, bullish MACD, and a 52-week low P/E—suggest a strong case for continuation, but a breakdown below $10.95 could trigger panic. Sector leader Whirlpool (WHR) is up 0.58%, signaling modest household durables sector strength. Investors should monitor the $12.29 52-week high as a critical threshold. If LEG clears this, the 30.3% premium could expand further. For now, the options market is pricing in a 70% probability of a deal, but regulatory or strategic hurdles remain. Act Now: Buy LEG20251219C12.5 if $12.50 is breached within 3 days; otherwise, pivot to the March 2026 contract for a safer play.