Johnson & Johnson (JNJ) will spin off at least 80.1% of its shares in consumer health company Kenvue (KVUE) through an exchange offer, the company said Monday.
J&J shareholders will have the choice to exchange all, some, or none of their common stock shares with Kenvue’s shares at a 7% discount.
KEY TAKEAWAYS
- Johnson & Johnson is offering shareholders the option to exchange shares for Kenvue’s at a 7% discount.
- Consumer health company Kenvue separated from Johnson & Johnson in May.
- J&J and Kenvue both reported better-than-expected results for the second quarter on resilient demand for their products.
Johnson & Johnson owned about 90% of Kenvue shares before launching the exchange offer. Kenvue was Johnson & Johnson’s Consumer Health business before it was separated through an initial public offering (IPO) in May as part of a strategic decision to make both companies more agile and create long-term value for their respective shareholders.
In the IPO filing, J&J had agreed not to distribute shares for 180 days after the prospectus was filed in April without the consent of the lead underwriters, Goldman Sachs and JPMorgan Securities.
J&J and Kenvue both reported better-than-expected results for the second quarter, as demand for J&J’s medtech products rose and consumer spending on Kenvue’s brands like Band-Aid and Tylenol proved resilient. For Kenvue, it was the first quarterly earnings report since its IPO.
Shares of Kenvue slipped about 0.3% in early trading on Monday following the announcement and were down about 11% year-to-date, while Johnson & Johnson shares were up about 1.7% and up 5.8% for the year so far.
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Source: https://www.investopedia.com/johnson-and-johnson-offers-exchange-for-shares-of-spinoff-kenvue-7564508?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo