(Reuters) - Tempur-Pedic International Inc (TPX.N) said it will acquire rival mattress maker Sealy Corp ZZ.N for about $242 million and assume about $750 million in debt.
Sealy’s shares were up about 9 percent in pre-market trade at $2.33 on Thursday, above the offer price of $2.20 per share, indicating that some investors expect a higher offer.
Tempur Pedic, which pioneered the specialty beds market with foam-based technology developed by NASA, is attempting to regain market share from fast-moving rivals by acquiring Sealy.
The offer price represents a 3 percent premium to Sealy’s Wednesday close of $2.14.
Tempur-Pedic said it had received consent from shareholders holding about 51 percent of Sealy’s stock. It said no other shareholder approvals are required to complete the deal.
After the deal, Tempur-Pedic and Sealy will continue to operate independently and Sealy Chief Executive Larry Rogers will remain CEO of Sealy and report to Mark Sarvary, Tempur-Pedic’s CEO.
Reporting by Juhi Arora in Bangalore; Editing by Akshay Lodaya