Loeb’s Third Point builds stake in Band-Aid maker Kenvue

By Svea Herbst-Bayliss

NEW YORK (Reuters) -Billionaire investor Daniel Loeb’s hedge fund Third Point is building a stake in Kenvue (NYSE:KVUE), sources familiar with the matter said on Friday, as some investors are pushing for strategic changes at the consumer healthcare company.

News of Third Point’s investment in the $44 billion Summit, New Jersey-headquartered maker of Band-Aids and Tylenol helped push its share price up more than 2% in late afternoon trading on Friday before giving up some gains to close at $23.01.

Kenvue, spun out of Johnson & Johnson (NYSE:JNJ) two years ago, has faced pressure from activist investors for months and avoided a full-blown proxy fight with Starboard Value in March when it added the firm’s founder and chief executive, Jeffrey Smith, to its board. 

Starboard pressed the company to review how it positions its brands and how they are priced in order to boost its performance.

Since reaching its agreement with Starboard, Kenvue has faced pressure from Toms Capital Investment Management, another activist firm that also built a stake and wants the company to consider strategic alternatives including a possible sale of the entire company or portions of it, sources familiar with the firm’s engagement said.

It could not be established how large Third Point’s investment is or whether the hedge fund has engaged with Kenvue’s board or management. A representative for Third Point declined to comment. The Financial Times first reported Third Point’s stake in Kenvue on Friday.

Kenvue said it regularly engages with its investors but does not comment on individual investor discussions. The board acts "in the best interests of the company and all Kenvue shareholders and we remain focused on accelerating sustainable, profitable growth and enhancing shareholder value," the company said in a statement.

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While Kenvue’s brands, including Aveeno, Listerine and Zyrtec, are well-known, net sales were flat at $15.5 billion in 2024. The company’s stock price, while up 8% this year, has slid 13.2% since being listed as a publicly traded company in May, 2022.

Third Point pursues a variety of strategies including, from time to time, activism in which it engages with management to push companies including Advance Auto Parts (NYSE:AAP), Walt Disney (NYSE:DIS) and Bath & Body Works (NYSE:BBWI) to perform better. 

It oversees roughly $12 billion in assets and returned 25% in 2024, a dramatic increase from a gain of roughly 4% in 2023 and a 22% loss in 2022. Last year, the firm rotated into consumer discretionary, financial and industrial companies that helped fuel returns after a post-election rally.

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