What Happened?

Shares of manufacturing company Leggett & Platt (NYSE: LEG) jumped 15.2% in the afternoon session after bedding manufacturer Somnigroup International proposed to acquire the company in an all-stock deal valued at about $1.6 billion. Under the terms of the unsolicited proposal, Leggett & Platt shareholders would receive Somnigroup common stock valued at $12.00 for each share they owned. This price represented a 30.3% premium to Leggett & Platt's average closing price over the previous 30 trading days. Leggett & Platt confirmed it received the non-binding offer and its Board of Directors planned to carefully review it with financial and legal advisors. The company also told its shareholders that no action was needed at the time.

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What Is The Market Telling Us

The previous big move we wrote about was 10 days ago when the stock gained 4.2% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

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