Steelcase (SCS) to Merge with HNI Corp (HNI)

Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for the same period. Also, its European Portfolios appreciated by 5.5%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Middle Coast Investing highlighted stocks such as Steelcase Inc. (NYSE:SCS). Steelcase Inc. (NYSE:SCS) is a portfolio of furniture and architectural products and services provider. The one-month return of Steelcase Inc. (NYSE:SCS) was 0.59%, and its shares gained 32.86% of their value over the last 52 weeks. On October 6, 2025, Steelcase Inc. (NYSE:SCS) stock closed at $16.98 per share, with a market capitalization of $1.948 billion.

Middle Coast Investing stated the following regarding Steelcase Inc. (NYSE:SCS) in its third quarter 2025 investor letter:

“The last buyout was the least expected. Steelcase Inc. (NYSE:SCS), a major position for us I discussed last quarter, agreed to merge with HNI Corp (HNI). HNI corp previously bought Kimball International in 2023; we sold our shares then and missed out on owning HNI. This time around, merger docs show Steelcase did not shop itself around, and it probably could have squeezed more from a full deal process. But the merger makes sense, and SCS shareholders will own 36% of the combined company. We don’t plan on selling any of our shares in the near future, though we’ll happily take the $7.2/share cash HNI is offering as part of the exchange.”

Steelcase Inc. (NYSE:SCS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 20 hedge fund portfolios held Steelcase Inc. (NYSE:SCS) at the end of the second quarter, compared to 25 in the previous quarter.  While we acknowledge the risk and potential of Steelcase Inc. (NYSE:SCS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Steelcase Inc. (NYSE:SCS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.