Kenvue, Johnson & Johnson’s consumer health business.
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Johnson & Johnson on Monday said it plans to chop at the least 80 percent. his rate at Kenvue, a consumer health firm it spun off as an independent company earlier this yr through an IPO.
J&J owns 89.6% of Kenvue’s common stock, representing greater than 1.72 billion shares.
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The Exchange Offer, also often called a split, will allow J&J shareholders to exchange all or a part of their shares for Kenvue common stock at a 7% discount. The offer is predicted to be tax-free, J&J said in a press release.
The corporate noted that the split is voluntary for investors and is predicted to shut on August 18, which is far sooner than expected.
J&J said it has received a waiver that dismisses the stock lock-up period related to Kenvue’s May IPO. This closing deal would require J&J to attend 180 days to sell any of its shares.
“We consider now could be the proper time to distribute our Kenvue shares, and we consider a spin-off is the proper solution to deliver value to our shareholders,” said Joaquin Duato, CEO of J&J.
Duato added that the split would increase J&J’s give attention to the pharmaceutical and medical business – which helped the corporate beat second-quarter revenue and revised last week’s profits.
J&J first announced its intention to launch the swap deal in its second-quarter earnings report on Thursday, but the corporate gave few details concerning the plan. Kenvue shares tumbled after the announcement, despite second-quarter results also beating Wall Street estimates.
Asked about J&J’s planned swap deal on Thursday, Kenvue CEO Thibaut Mongon told CNBC’s Squawk on the Street that the corporate was “joyful with the best way the IPO was received by shareholders.”
“We see a variety of agreement amongst our recent investors in recognizing the potential of Kenvue, but I can say that we’re fully prepared to depart as a totally independent company,” he said.