Johnson & Johnson to spin off at least 80.1% of Kenvue shares in an exchange offer

Johnson & Johnson
JNJ,
+1.07%
said Monday it is planning to spin off at least 80.1% of its shares of Kenvue Inc.
KVUE,
-2.04%
through an exchange offer. The consumer goods and healthcare giant announced its intention to launch an exchange offer for the separation of Kenvue, its consumer health business which went public in May, when it reported earnings last week. Johnson & Johnson shareholders can exchange some or all of their J&J shares for Kenvue shares at a 7% discount, the company said in a statement. In connection with the move, J&J has received a wavier of the 180-day lockup with respect to the shares of Kenvue held by the joint bookrunners on the IPO. “The separation of Kenvue further sharpens Johnson & Johnson’s focus on transformational innovation specifically in Pharmaceutical and MedTech,” said J&J Chief Executive Joaquin Duato. The exchange is subject to an upper limit of 8.0549 shares of Kenvue per J&J share tendered and accepted in the offer. “If the upper limit is not in effect, tendering shareholders are expected to receive approximately $107.53 of Kenvue common stock for every $100 of Johnson & Johnson common stock tendered,” said the statement. J&J currently owns 1,716,160,000 shares of Kenvue common stock, equal to about 89.6% of total outstanding shares. Kenvue’s stock was slightly lower premarket.