Kenvue Bondholders Back Covenant Cuts On All Seven Note Series; Late Tenders Lose $1.00 Cash
Kimberly-Clark said holders tendered 73.64% to 98.37% of each Kenvue series by the early deadline, and the changes take effect only at settlement.
Kimberly-Clark said Tuesday it has the requisite consents from Kenvue bondholders to change the indenture covering every outstanding Kenvue note series, according to an 8-K. It also cut the deal for late tenders: they still get new notes and a premium, but no cash payment.
What the filing and release say
By the early deadline of 5:00 p.m. New York time on October 9, holders had tendered between 73.64% and 98.37% of each of the seven series, the press release shows. The 5.050% notes due 2053 led: $1,475,569,000 tendered of $1,500,000,000 outstanding, or 98.37%.
The lowest participation was in the 5.050% notes due 2028, at $736,389,000 of $1,000,000,000 (73.64%). The others fell between: 5.000% due 2030 at 82.22%, 4.850% due 2032 at 93.37%, 4.900% due 2033 at 90.08%, 5.100% due 2043 at 97.11% and 5.200% due 2063 at 96.61%.
Kenvue has signed a supplemental indenture carrying the amendments. They eliminate substantially all restrictive covenants, certain default triggers (other than failure to pay principal, premium or interest), the SEC reporting covenant, and limits on Kenvue merging with another party or transferring its assets.
The changed terms for tenders
Holders who tendered by the early date get $970 principal amount of new Kimberly-Clark notes per $1,000 of Kenvue notes, a $30 early premium paid in notes, and $1.00 in cash. They must still own the notes at expiration to receive the premium and cash.
Holders who tender after October 9 but by expiration now get the $970 and the $30 premium, but not the $1.00 cash payment. The offers cover up to $7.0 billion of new notes. Tendered notes and consents generally cannot be withdrawn or revoked.
What to watch
The amendments become operative only when the exchange offers settle. The offers expire at 5:00 p.m. on October 27 unless extended, and are conditioned on Kimberly-Clark's acquisition of Kenvue closing, which the company expects in the fourth quarter. Kimberly-Clark does not anticipate settlement before November 2.
Per Yahoo Finance, each Kenvue share will convert into $3.50 in cash and 0.14625 Kimberly-Clark shares, with about $2.1 billion in annual synergies net of reinvestment cited by the companies.
The expiration is October 27, but the release expects it to be extended to line up with the Kenvue closing, with settlement no earlier than November 2.
Sources
- 8-K Filing — KIMBERLY CLARK CORP (KMB) — SEC EDGAR
- Exhibit tm2627373d1_ex99-1.htm — KIMBERLY CLARK CORP 8-K exhibit — SEC EDGAR
- Kimberly-Clark’s (KMB) Kenvue (KVUE) Deal Has Jim Cramer Looking Years Ahead — Yahoo Finance
