(Bloomberg) — Shares of consumer-products company Kenvue Inc. rose the most in two months after activist investor Starboard Value took a stake in the Tylenol maker with an eye toward making changes to boost the company’s stock price.
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Starboard hasn’t disclosed its stake in Kenvue — spun out of Johnson & Johnson last year — or what issues it aims to tackle, but a person familiar with the matter described it as “sizable.”
The stock was up 6.6% on Monday, giving it a market value of about $44 billion. As of last week, Kenvue shares had gained less than 1% this year, compared with the 23% rise of the S&P 500 Index.
The activist thinks Kenvue has some of the best consumer brands in the industry but its shares have underperformed the broader market, according to The Wall Street Journal, which earlier reported the news, citing unidentified people familiar with the matter.
Starboard declined to comment. Kenvue didn’t respond to requests for comment.
Other Kenvue brands include Aveeno, Band-Aid, Zyrtec, Neosporin and Neutrogena. Health and beauty make up about 28% of the Skillman, New Jersey-based company’s business, and its performance in that area has been lagging behind peers’.
Even as the skin-care industry grew unit sales by 3.6% last year, according to Circana data, sales volumes of Kenvue’s brands fell 4.8%. Those declines continued in the company’s most recent quarter, though higher prices drove a 1.5% increase in organic sales.
–With assistance from Matthew Monks and Catherine Larkin.
(Updates with confirmation of the stake)
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