Wells Fargo says Johnson & Johnson’s Kenvue spin may complete in Q3

On Monday, Johnson & Johnson (NYSE:) announced an exchange offer for its stockholders to choose shares of Kenvue (NYSE:), its newly listed consumer health unit.

The company said it intends to split off at least 80.1% of the shares of Kenvue, formerly Johnson & Johnson’s Consumer Health business.

Reacting to the report Monday, Wells Fargo analysts said JNJ, which is one of its signature picks, could launch the exchange offer for KVUE shares as soon as in the next few days to complete the spin in Q3.

“JNJ plans to launch its exchange offer of KVUE shares for JNJ shares as early as in the next few days, assuming the banks waive the 180-day KVUE IPO lock up. Details of the exchange – i.e. discount, exchange ratio, etc – will be disclosed with the launch,” the analysts wrote.

“Using LLY/ELAN as the basis, we estimate that ~215MM shares or ~8% of JNJ outstanding shares may be exchanged for the 89.6% of KVUE stake held by JNJ.”