Attention, those of you who own Leggett & Platt Inc. (LEG): LEG has been acquired by Somnigroup International Inc. (SGI). As a result of this acquisition, all owners of LEG have received 0.145 shares of SGI for every 1 share of LEG that was previously owned.
Due to the merger, some alterations need to be made to your Snider Investment Method worksheets.
On your Individual Stock Purchase Record, you will need to adjust each outstanding purchase you had of LEG prior to the merger. Take the quantity of shares you purchased in each transaction and multiply it by 0.145; for example, if your purchase level was 100, you will take each purchase of 100 shares and multiply it by 0.145, leaving you with 14.5 shares.
You can then adjust the price paid for each purchase by dividing it by 0.145. For example, if your initial purchase price was $30 for LEG, you will divide that figure by 0.145, leaving you with an adjusted initial purchase price of roughly $206.90 for SGI going forward.
| Original LEG Shares | SGI Repurchase Amount |
| 1000 | 145 |
| 2000 | 290 |
| 3000 | 435 |
| 4000 | 580 |
| 5000 | 725 |
Lattco AutoPilot clients: if your LEG position was open when the merger was completed, the adjustments to the SGI position have been made for you and will be reflected in your account on next Trade Day.
LEG, and now SGI, is in a frustrating position as it has declined significantly since we initially purchased shares. In most cases, it has been and will remain in winter until the price appreciates. The merger may create additional difficulty in implementing the standard Snider Method.
At this time, we are not recommending clients sell the shares or take any actions outside the normal Snider Investment Method rules. If you reach a point where the market price of SGI is similar to your last adjusted purchase price, please contact us. We will evaluate the position together to decide if transmogrification is the appropriate course to take.