Johnson & Johnson
(NYSE: JNJ)
today announced its intention to split off at least 80.1% of the shares of Kenvue.
The New Brunswick, New Jersey-based company plans for the separation of its former consumer health business to take place through an exchange offer. Kenvue completed its IPO in May 2023.
Through the planned exchange offer, Johnson & Johnson shareholders can exchange all, some or none of their stock for Kenvue common stock. The company expects the exchange offer to be tax-free for U.S. federal income tax purposes. In connection with the planned split-off, J&J received a waiver of a 180-day lock-up. This relates to shares of Kenvue common stock held by the company from the joint lead book-running managers of the IPO.
“The separation of Kenvue further sharpens Johnson & Johnson’s focus on transformational innovation, specifically in Pharmaceutical and MedTech,” said Joaquin Duato, chair and CEO. “We believe now is the right time to distribute our Kenvue shares, and we are confident that a split-off is the appropriate path forward to bring value to our shareholders.”
More details of the Johnson & Johnson exchange offer
The exchange offer permits J&J shareholders to exchange their shares for Kenvue shares at a 7% discount. This remains subject to an upper limit of 8.0549 shares of Kenvue common stock per share of J&J common stock tendered and accepted.
With no upper limit in effect, J&J expects tendering shareholders to receive approximately $107.53 of Kenvue stock for every $100 of J&J stock.
The company intends to determine the prices at which shares of its common stock and Kenvue stock will be exchanged by reference to the arithmetic average of the daily volume-weighted average prices of shares of Johnson & Johnson common stock and Kenvue common stock on the NYSE during the three consecutive trading days ending on and including the second trading day preceding the expiration date of the exchange offer, which are expected to be August 14, 15 and 16, 2023, if the exchange offer is not extended or terminated.
Completion of the exchange remains subject to certain conditions. That includes the distribution of at least 460,149,135 shares of Kenvue common stock in exchange for J&J shares. The company currently owns 1,716,160,000 shares of Kenvue common stock, approximately 89.6% of the total outstanding shares. The company offers the exchange of up to 1,533,830,450 shares of Kenvue common stock for outstanding shares of its own.
