Thibaut Mongon, CEO and Paul Ruh CFO of Kenvue Inc. a Johnson & Johnson’s consumer-health enterprise, pose collectively in the course of the firm’s IPO on the New York Stock Exchange (NYSE) in New York City, U.S., May 4, 2023.
Brendan McDermid | Reuters
Johnson & Johnson on Thursday mentioned its shareholders will soon give you the option to swap their shares for stock of Kenvue, which spun out as an impartial client well being firm simply two months in the past.
J&J owns almost 90% of Kenvue shares and plans to cut back its stake by means of an change provide that might launch “as early as the approaching days,” relying on market situations, J&J CFO Joseph Wolk mentioned in the course of the firm’s second-quarter earnings name.
That course of, also called a split-off, will enable J&J shareholders to change all or a portion of their shares for Kenvue’s widespread stock. J&J didn’t present additional particulars on the deliberate provide.
But Wolk mentioned a split-off is the “most advantageous type of separation” for J&J. He added that after the break up, Kenvue will most probably have a shareholder base that wishes to personal its stock.
When requested about J&J’s deliberate change provide, Kenvue CEO Thibaut Mongon advised CNBC’s “Squawk on the Street” that the corporate is “happy with the way in which that the IPO has been obtained by shareholders.”
“We see quite a lot of alignment amongst our new investors in seeing the potential of Kenvue, however I can inform you that we’re totally prepared to depart as a totally impartial firm,” he mentioned.
Kenvue shares fell following the announcement Thursday, although the corporate beat earnings and income estimates in its first quarterly report since its IPO. Kenvue additionally initiated a quarterly money dividend of about 20 cents per share for the third quarter, payable to shareholders on Sept. 7.
J&J’s second-quarter results additionally beat expectations on Thursday, sending the corporate’s stock 6% larger.
Previously, J&J didn’t disclose whether or not it could divest its Kenvue shares by means of a split-off or a derivative. The latter would contain distributing Kenvue stock to present J&J shareholders quite than giving them the choice to change.
The recommended timing of the provide got here as a shock.
Kenvue’s IPO filing in April mentioned J&J agreed to wait 180 days to promote or switch its shares of the brand new firm, which might have restricted any split-off till the tip of October on the earliest.
The submitting mentioned J&J would solely give you the option to accomplish that with written permission from Goldman Sachs and JPMorgan Chase, the IPO’s lead underwriters.
