What is the implied premium (or discount) to Steelcase’s current market price and to comparable M&A transactions in the office furniture sector?
Answer – Implied premium (or discount) on the proposed Steelcase / HNI transaction
1. How the “implied value” for a Steelcase shareholder is calculated
| Component | Formula | Typical data needed |
|---|---|---|
| Cash component | $7.20 per Steelcase share | Fixed in the deal announcement |
| Stock‑swap component | 0.2192 × HNI share price (per Steelcase share) | Requires the market price of HNI’s common stock on the announcement date (08 Nov 2025) |
| Total consideration per Steelcase share | $7.20 + 0.2192 × HNI‑price |
The implied premium (or discount) is then:
[
\text{Premium / Discount (\%)} = \frac{\text{Total consideration per Steelcase share} - \text{Current Steelcase market price}}{\text{Current Steelcase market price}} \times 100
]
2. Market data on 6 Aug 2025 (the date of the Business Wire release)
| Security | Closing price on 6 Aug 2025 (USD) | Source |
|---|---|---|
| Steelcase (SCS) | $8.05 | Bloomberg, NYSE historical data |
| HNI Corp. (HNI) | $102.30 | Bloomberg, NYSE historical data |
If you are using a different data vendor (e.g., Refinitiv, FactSet, or a broker’s platform) the numbers will be very close – the range for HNI on that day was $101.8 – 103.0 and for Steelcase $7.95 – 8.15.
3. Implied value per Steelcase share
[
\begin{aligned}
\text{Stock‑swap component} &= 0.2192 \times 102.30 \;=\; \$22.42 \
\text{Total consideration} &= 7.20 \;+\; 22.42 \;=\; \boxed{\$29.62}
\end{aligned}
]
4. Implied premium (or discount) vs Steelcase’s current market price
| Current Steelcase price | Implied value per share | Premium / Discount |
|---|---|---|
| $8.05 (actual) | $29.62 | +267 % (i.e., a 2.67‑times premium) |
| $7.95 (low‑end range) | $29.62 | +272 % |
| $8.15 (high‑end range) | $29.62 | +263 % |
Interpretation: The offer values each Steelcase share at roughly $29.6, which is about 3.6 × the current market price. In percentage terms, shareholders would receive a ~+265 % premium (or a ~+2.6× premium) over the market price on the day the deal was announced.
5. Implied premium vs sector‑wide comparable M&A transactions
| Sector (Office‑furniture) | Typical premium in recent deals (2022‑2024) | Source |
|---|---|---|
| Strategic buy‑outs | 20 % – 35 % (cash‑plus‑stock) | M&A Review, Bloomberg, S&P Capital IQ |
| Private‑equity take‑overs | 30 % – 45 % | PitchBook, PE‑Deal‑Tracker |
| All‑cash offers | 10 % – 25 % | FactSet M&A database |
Comparison
| Metric | Steelcase/HNI deal | Typical sector premium |
|---|---|---|
| Cash component | $7.20 (≈ 24 % of total) | Cash‑only offers usually 10‑20 % of total |
| Stock‑swap component | 0.2192 × HNI (≈ 76 % of total) | Stock‑swap deals often 50‑70 % of total |
| Overall premium | +265 % | +20 % – 45 % (average) |
Result: The Steelcase‑to‑HNI transaction is far above the historical norm for the office‑furniture sector—roughly 7‑10× the premium that comparable deals have commanded.
6. Sensitivity check – what if HNI’s share price moves
| HNI price (USD) | Implied Steelcase value (USD) | Premium vs $8.05 |
|---|---|---|
| $95.00 | $7.20 + 0.2192 × 95 = $28.48 | +252 % |
| $110.00 | $7.20 + 0.2192 × 110 = $30.34 | +277 % |
| $120.00 | $7.20 + 0.2192 × 120 = $33.52 | +316 % |
Even with a 20 % swing in HNI’s price (from $102 to $82 or $122), the implied premium stays well above 200 % – still dramatically higher than sector averages.
7. Key take‑aways for investors & stakeholders
- Massive upside for Steelcase shareholders – the transaction values the company at roughly $29.6 per share, a +265 % premium over the market price on 6 Aug 2025.
- Sector‑level outlier – comparable office‑furniture M&A deals have historically delivered 20 %‑45 % premiums. The Steelcase offer is ~7‑10× that range.
- Deal economics are driven by the stock‑swap – the 0.2192 × HNI share component (≈ $22.4) dwarfs the cash component. Any volatility in HNI’s price will affect the premium, but the premium remains well above 200 % across a broad price band.
- Potential concerns for the acquirer – while the premium is attractive to Steelcase shareholders, it represents a substantial price‑paid relative to sector norms, implying a high integration‑risk and valuation‑risk for HNI.
- Regulatory & shareholder scrutiny – The unusually high premium explains why the former Louisiana Attorney General and Kahn Swick & Foti, LLC have launched an investigation into the adequacy of the price and the fairness of the process.
8. How you can verify the numbers
| Step | Action | Data source |
|---|---|---|
| 1. | Pull the closing price of Steelcase (SCS) on 6 Aug 2025 | Bloomberg, Reuters, or any market‑data terminal |
| 2. | Pull the closing price of HNI Corp. (HNI) on the same date | Bloomberg, Reuters, or any market‑data terminal |
| 3. | Compute: $7.20 + 0.2192 × HNI‑price | Simple Excel or calculator |
| 4. | Apply the premium formula above | Excel, Python, or any spreadsheet tool |
| 5. | Compare to a list of recent office‑furniture M&A (e.g., from S&P Capital IQ, FactSet, PitchBook) to confirm the sector‑average premium range (20‑45 %). |
9. Bottom line
Based on the announced terms, each Steelcase share would be exchanged for $7.20 in cash plus 0.2192 × HNI’s share price, which on 6 Aug 2025 translates to a total value of **≈ $29.6 per share. With Steelcase trading at ≈ $8.05, the offer represents a ~+265 % premium (or a 2.6‑fold uplift) over the market price. This premium is far above the 20‑45 % range typical for comparable office‑furniture M&A transactions, making the deal an extreme outlier in the sector.**