Johnson & Johnson said on Monday that it had launched an exchange offer under which its stockholders can opt for shares of Kenvue, its newly listed consumer health unit.
J&J, which currently owns an 89.6% stake in Kenvue, said it intends to split off at least 80.1% of the consumer health company's shares as part of the offering.
The offering will help J&J move a step closer in its plan to spin off the unit and focus on its larger medical devices and pharmaceuticals businesses.
The exchange will allow J&J shareholders to exchange their shares for those of Kenvue at a 7% discount, subject to conditions.
Kenvue, which debuted on the New York Stock Exchange in May, has a market capitalisation of about $46 billion.
The offering comes days after J&J and Kenvue both forecast strong profit for this year.
Goldman Sachs and J.P. Morgan Securities are serving as dealer managers for the offering, J&J said.
J&J shares rose about 1% in premarket trading.
Full-Year Profit
On 21 July, Kenvue, the former consumer health unit of Johnson & Johnson, forecast full-year profit above Wall Street estimates, betting on resilient demand for its skincare and self-care products, such as Neutrogena and Tylenol.
Shares of the company still fell as much as 10% after J&J, which owns 90% of Kenvue's outstanding shares, said a tender offer to sell the stake could start as early as the coming days.
The timing of the tender offer "was earlier than expected" because there was a 180-day lockup following Kenvue's initial public offering (IPO) in May, said Navann Ty, an analyst at BNP Paribas Exane. Typically, company insiders cannot sell shares during the IPO lock-up period.
Kenvue, in its first results announcement after going public, forecast annual adjusted profit per share between $1.26 and $1.31, above analysts' expectations of $1.23, according to Refinitiv.
Read More: J&J Spinoff Kenvue Forecasts Upbeat Annual Profit On Self-Care Boost
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