WSJ : Activist Investors in Kenvue Faced Big Losses. Kimberly-Clark Saved the Da

Activist Investors in Kenvue Faced Big Losses. Kimberly-Clark Saved the Day.
D.E. Shaw, one of the Tylenol-maker’s largest shareholders, stood to lose over $200 million but is now expected to break even on its bet

Kimberly-Clark KMB -13.10%decrease; red down pointing triangle not only saved its embattled rival, Kenvue KVUE 14.92%increase; green up pointing triangle, with a $40 billion takeover deal. It also saved activist hedge funds targeting the Tylenol-maker who had been staring down massive losses.

At least four activist investors held stakes in Kenvue’s shares, betting on a turnaround of the company’s operations or an outright sale. What they didn’t anticipate was that the Trump administration would link acetaminophen, the active ingredient in Tylenol, as a potential cause of autism and open the company to the potential of costly legal action and lost sales.

Kenvue has maintained that the accusations are baseless, and both scientists and medical groups have denounced Trump’s claims as unfounded.

Still, Trump’s claims helped trigger a selloff of almost 22% in Kenvue’s share price before Monday’s deal announcement.

D.E. Shaw, one of the Tylenol-maker’s largest shareholders, stood to suffer some of the biggest losses, with a stake of around 3%, according to people familiar with the matter. The New York-based hedge fund had endured a paper loss of more than $200 million on its investment before Monday, according to the people.

But now because of Kimberly-Clark’s offer, the activist investor is set to break even on its investment, the people said.

Toms Capital Investment Management is another big shareholder in Kenvue with a more than 3% stake that it started building earlier this year.

Last month, at a Morgan Stanley-sponsored hedge fund conference in New York, Ben Pass, the chief investment officer at Toms Capital Investment Management, argued that legal risks around Tylenol were ​​obscuring the company’s value, according to people who heard his presentation.

He also argued the company has valuable brands that if managed better could be worth substantially more than reflected in the current stock price, the people said. Kenvue’s other brands include Aveeno, Band-Aid, Listerine and Neutrogena.

Toms plans to keep holding its Kenvue shares after Monday’s deal, some of the people familiar with the matter said.

“Congratulations to Kimberly-Clark and Kenvue for creating a great American company poised to deliver tremendous benefits for both consumers and shareholders,” Pass said in a statement.

Other activist investors exposed to Kenvue’s selloff include Starboard Value, which has owned shares for at least a year. Dan Loeb’s Third Point had also built a position.

Kenvue spun out of Johnson & Johnson in 2023, going public at $22 per share to help fund growth of J&J’s pharmaceuticals and medical technology businesses. The stock initially popped but has since been in decline as the company struggled to boost organic sales even before the controversy around Tylenol.

Starboard was among the first activists to publicly place a bet on Kenvue’s prospects for a turnaround. Roughly one year ago, the firm took a significant stake and started outwardly pushing for changes. In February, Starboard launched a proxy fight, resulting in the appointment of the firm’s Chief Executive Officer Jeff Smith to Kenvue’s board.

Around that time, Kenvue’s stock was trading at $23.04, and the price had fallen almost 38% before Monday.

It isn’t clear whether Starboard made money from its bet. But it is a lot better off today because of the deal, even as the value of Kimberly-Clark’s bid, at $21.01 per share, is below where Starboard first took a position.

Kimberly-Clark and Kenvue say they expect almost $2 billion in cost savings from the deal in the first three years after the transaction closes.

>>> US Research Calls I

Research Calls I
  • Upgrades
    • Antero Resources (AR) upgraded to Overweight from Equal Weight at Wells Fargo, tgt $39
    • Aon plc (AON) upgraded to Buy from Neutral at Citigroup, tgt $402
    • Boeing (BA) upgraded to Buy from Hold at Freedom Capital, tgt $223
    • Casella Waste Systems (CWST) upgraded to Equal Weight from Underweight at Barclays, tgt $95
    • Cisco (CSCO) upgraded to Buy from Neutral at UBS, tgt $88
    • Ecolab (ECL) upgraded to Outperform from In Line at Evercore ISI, tgt $300
    • Edwards Lifesciences (EW) upgraded to Outperform at Raymond James, tgt $96
    • First Bancorp (FBNC) upgraded to Overweight from Neutral at Piper Sandler, tgt $58
    • First Foundation (FFWM) upgraded to Overweight from Neutral at Piper Sandler, tgt $6.75
    • Incyte (INCY) upgraded to Buy from Neutral at Guggenheim, tgt $125
    • Kilroy Realty (KRC) upgraded to Outperform from Sector Perform at RBC Capital, tgt $47
    • LCI Industries (LCII) upgraded to Market Perform from Underperform at BMO Capital, tgt $110
    • Linde (LIN) upgraded to Buy from Neutral at Seaport Research Partners, tgt $500
    • Madrigal Pharmaceuticals (MDGL) upgraded to Neutral from Underperform at BofA Securities, tgt $445
    • MoonLake Immunotherapeutics (MLTX) upgraded to Buy from Neutral at H.C. Wainwright, tgt $30
    • Netflix (NFLX) upgraded to Outperform from Neutral at KGI Securities, tgt $1,350
    • Nestle (NSRGY) upgraded to Buy from Hold at Berenberg
    • Pampa Energia (PAM) upgraded to Buy from Neutral at Citigroup, tgt $113
    • ProPetro Holding (PUMP) upgraded to Overweight from Neutral at Piper Sandler, tgt $16
    • Replimune (REPL) upgraded to Market Perform from Underperform at BMO Capital, tgt $11
    • Red Rock Resorts (RRR) upgraded to Buy from Hold at Stifel, tgt $68
    • Roku (ROKU) upgraded to Overweight from Neutral at Piper Sandler, tgt $135
    • Societe Generale (SCGLY) upgraded to Buy from Hold at Kepler Cheuvreux
    • Universal Health Services (UHS) upgraded to Outperform from Market Perform at Raymond James, tgt $270
    • Westlake Chemical (WLK) upgraded to Buy from Neutral at BofA Securities
  • Downgrades
    • AptarGroup (ATR) downgraded to Market Perform from Outperform at William Blair
    • Arcos Dorados (ARCO) downgraded to Neutral from Outperform at Bradesco BBI, tgt $8.50
    • Brown & Brown (BRO) downgraded to Neutral from Buy at BofA Securities, tgt $97
    • Charter Communications (CHTR) downgraded to Market Perform from Outperform at Bernstein, tgt $280
    • Charter Communications (CHTR) downgraded to Sector Weight from Overweight at KeyBanc
    • Canadian Solar (CSIQ) downgraded to Hold from Buy at Jefferies, tgt $19.64
    • Exelixis (EXEL) downgraded to Neutral from Buy at Guggenheim
    • IQVIA Holdings (IQV) downgraded to Hold from Buy at TD Cowen, tgt $215
    • Luminar Technologies (LAZR) downgraded to Underweight from Neutral at JPMorgan
    • Marsh & McLennan (MMC) downgraded to Underperform from Neutral at BofA Securities, tgt $181
    • Owens & Minor (OMI) downgraded to Neutral from Buy at UBS, tgt $4
    • Rigetti Computing (RGTI) downgraded to Neutral from Buy at B. Riley, tgt $42
    • Vodafone (VOD) downgraded to Sell from Neutral at UBS
  • Others
    • Alliance Laundry Holdings (ALH) initiated with a Buy at BofA Securities, tgt $37
    • Alliance Laundry Holdings (ALH) initiated with a Buy at Citigroup, tgt $32
    • Alliance Laundry Holdings (ALH) initiated with a Buy at Goldman, tgt $32
    • Alliance Laundry Holdings (ALH) initiated with an Equal Weight at Morgan Stanley, tgt $28
    • Alliance Laundry Holdings (ALH) initiated with an Overweight at JPMorgan, tgt $31
    • Alliance Laundry Holdings (ALH) initiated with an Outperform at Robert W. Baird, tgt $31
    • Alliance Laundry Holdings (ALH) initiated with an Outperform at BMO Capital, tgt $30
    • Alliance Laundry Holdings (ALH) initiated with a Buy at UBS, tgt $31
    • Chime Financial (CHYM) initiated with a Hold at Jefferies, tgt $17
    • DT Midstream (DTM) initiated with a Buy at Jefferies, tgt $125
    • Disc Medicine (IRON) resumed with a Buy at Stifel, tgt $125
    • Halliburton (HAL) initiated with a Buy at Rothschild & Co Redburn, tgt $35
    • Intuitive Machines (LUNR) initiated with a Buy at Stifel, tgt $18
    • Kalaris Therapeutics (KLRS) initiated with an Outperform at Citizens JMP, tgt $20
    • Kymera Therapeutics (KYMR) assumed with a Buy at Guggenheim, tgt $90
    • Phoenix Education Partners (PXED) initiated with a Hold at Truist, tgt $38
    • Phoenix Education Partners (PXED) initiated with a Buy at Jefferies, tgt $46
    • Phoenix Education Partners (PXED) initiated with an Overweight at Morgan Stanley, tgt $45
    • Phoenix Education Partners (PXED) initiated with an Outperform at BMO Capital, tgt $45
    • Phoenix Education Partners (PXED) initiated with a Neutral at Goldman, tgt $42
    • Pitney Bowes (PBI) initiated with a Neutral at Goldman, tgt $11
    • Playtika Holding (PLTK) initiated with a Hold at Freedom Capital, tgt $3.75
    • Qnity Electronics (Q) initiated with an Outperform at Wolfe Research, tgt $110
    • Revolution Medicines (RVMD) initiated with an Outperform at RBC Capital, tgt $77
    • SLB (SLB) initiated with a Buy at Rothschild & Co Redburn, tgt $48
    • Solstice Advanced Materials (SOLS) initiated with a Buy at UBS, tgt $62

>>> Caribou Biosciences announces positive results from its ongoing ANTLER phase

Caribou Biosciences announces positive results from its ongoing ANTLER phase 1 clinical trial evaluating vispacabtagene regedleucel, an allogeneic anti-CD19 CAR-T cell therapy, in patients with relapsed or refractory B cell non-Hodgkin lymphoma (2.42)
  • Data demonstrate efficacy and durability of vispa-cel, an allogeneic anti-CD19 CAR-T cell therapy, are on par with autologous CAR-T cell therapies in the confirmatory cohort (N=22) and with longer-term follow-up on patients who received optimized vispa-cel (N=35).
    • 82% ORR, 64% CR rate, 51% PFS at 12 months in patients prospectively enrolled in partial HLA matching confirmatory cohort (N=22).
    • 86% ORR, 63% CR rate, 53% PFS at 12 months in patients who received vispa-cel with an optimized profile (N=35).
  • Vispa-cel is generally well-tolerated, allowing for administration in the outpatient setting.
  • Data highlight vispa-cel's potential as best-in-class allogeneic CAR-T cell therapy for LBCL.
  • Conference call and webcast scheduled for today at 8:00 am ET

>>> uniQure received feedback from the U.S. Food and Drug Administration during

uniQure received feedback from the U.S. Food and Drug Administration during a recent pre-Biologics License Application meeting regarding AMT-130, an investigational gene therapy for Huntington’s disease (67.69)
  • Though final meeting minutes have not yet been received, based on the discussions at the meeting, uniQure believes that the FDA currently no longer agrees that data from the Phase I/II studies of AMT-130 in comparison to an external control, as per the prespecified protocols and statistical analysis plans shared with the FDA in advance of the analyses, may be adequate to provide the primary evidence in support of a BLA submission. This is a key shift from prior communications with the FDA in multiple Type B meetings over the past year. Consequently, the timing of the BLA submission for AMT-130 is now unclear.
  • uniQure expects to receive final minutes within 30 days of the meeting and plans to urgently interact with the FDA to find a path forward for the timely accelerated approval of AMT-130.
  • The FDA granted AMT-130 Breakthrough Therapy designation based upon data from the Phase I/II studies compared to external controls in April 2025 and Regenerative Medicines Advanced Therapy designation in May 2024.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:
  • HKD -7.8%, VERX -4.6%, BRKR -3.7%, BCRX -3.1%, MSEX -2.7%, KOS -2.5%, SPR -1.3%, KRYS -1.3%, AXSM -1.2%
Other news:
  • ALVO -23.3% (receives FDA Complete Response Letter for AVT05 Biosimilar Application; lowers FY25 revs guidance)
  • KMB -14.1% (Kenvue to be acquired by Kimberly-Clark Corporation (KMB) in cash/stock deal)
  • TMQ -3.8% (files mixed securities shelf offering)
  • CAAS -3.7% (subsidiary Hubei Henglong Automotive Systems Group signed a strategic cooperation memorandum of understanding with KYB-UMW Sdn Bhd in Malaysia) CMS -2.3% (proposes offering of $750 million of convertible senior notes due 2031)
  • CVI -1.5% (files mixed securities shelf offering)
  • IMAX -1.5% (proposes convertible senior notes offering for the partial refinancing of outstanding 2026 notes, working capital, share repurchases or other general corporate purposes)
  • CRBG -1% (CFO resigns)
  • SO -0.9% (plans to sell 35 million equity units in a public offering)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance
:
  • LQDA +11.2%, MD +9%, CMPO +8.3%, FRPT +7.7%, IDXX +7.6%, TGTX +6.2%, FUBO +4.5%, ARES +2.1%, BNTX +2%, NSSC +1.9%, KTB +1.8%, AMG +1.7%, BRK.B +0.9%
Other news:
  • CRBU +74.8% (to host webcast to report new data updates from two allogeneic CAR-T Cell Therapy programs in Lymphoma and Multiple Myeloma)
  • BNTC +34.6% (provides positive interim clinical study results for BB-301 Phase 1b/2a clinical trial and receives FDA Fast Track Designation for BB-301)
  • IREN +23.3% (secures $9.7 billion AI cloud contract with Microsoft)
  • KVUE +21.6% (Kenvue to be acquired by Kimberly-Clark Corporation (KMB) in cash/stock deal; KVUE beats by $0.02, misses on revs; reaffirms FY25 EPS guidance)
  • ECX +13% (secures up to $150 million to advance strategic growth initiatives and strengthen liquidity)
  • WULF +5.9% (announces closing of $1.025 billion 0.00% convertible notes offering; co intends to use the net proceeds to fund a portion of the cost of construction of a data center campus in Abernathy, Texas and for general corporate purposes)
  • CIVI +3.8% (SM Energy and Civitas Resources (CIVI) announce $12.8 billion all-stock merger)
  • IDCC +3% (wins injunction against Disney (DIS) in German patent case)
  • MOLN +2.9% (to present updated data from Phase 1/2a trial of MP0533 in AML at ASH Annual Meeting)
  • HCM +2.3% (highlights pipeline and business progress at R&D Updates Event)
  • APLD +2.2% (files for 1,035,197 share common stock offering by selling shareholders)
  • UAN +1.9% (files mixed securities shelf offering)
  • OBIO +1.8% (files for 8,027,890 share common stock offering by selling shareholders)
  • SM +1.8% (SM Energy and Civitas Resources (CIVI) announce $12.8 billion all-stock merger; also reported earnings)
  • WLK +1.5% (files mixed securities shelf offering)
  • NIO +1.5% (Oct deliveries)
  • XPEV +1.2% (Oct deliveries)

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • CRBU +140.1%, KVUE +22.2%, IREN +21%, LQDA +10.3%, MD +7.2%, FRPT +6.9%, IDXX +5.6%, CIVI +5.2%, WULF +4.6%, SM +3.2%, CMPO +3.2%, BNTX +2.9%, IDCC +2.5%, HCM +2.2%, OBIO +1.8%, WLK +1.7%, APLD +1.5%, NIO +1.4%, MOLN +1.3%, BRK.B +1.3%, ECX +1.2%, UAN +1.1%, XPEV +1.1%, L +1.1%, BLTE +0.9%, TS +0.9%, ARES +0.9%
  • Gapping down:
    • ALVO -23.3%, KMB -17.8%, CAAS -3.7%, NAT -3.3%, HKD -3.1%, TMQ -2.7%, MSEX -2.7%, KOS -2.5%, CVI -1.5%, IMAX -1.5%, SPR -1.3%, SO -1.2%, CRBG -1%, BTBT -0.8%

>>> Kenvue to be acquired by Kimberly-Clark Corporation (KMB) in cash/stock deal

Kenvue to be acquired by Kimberly-Clark Corporation (KMB) in cash/stock deal; KVUE beats by $0.02, misses on revs; reaffirms FY25 EPS guidance (14.37)
  • Kimberly-Clark Corporation (KMB) and Kenvue (KVUE) announced an agreement under which Kimberly-Clark will acquire all of the outstanding shares of Kenvue common stock in a cash and stock transaction that values Kenvue at an enterprise value of approximately $48.7 billion, based on the closing price of Kimberly-Clark common stock on October 31, 2025.
  • Under the terms of the agreement, which has been unanimously approved by each company's Board of Directors, Kenvue shareholders will receive $3.50 per share in cash as well as 0.14625 Kimberly-Clark shares for each Kenvue share held at closing, for a total consideration to Kenvue shareholders of $21.01 per share, based on the closing price of Kimberly-Clark shares as of October 31, 2025. Upon closing of the transaction, current Kimberly-Clark shareholders are expected to own approximately 54% and current Kenvue shareholders are expected to own approximately 46% of the combined company on a fully diluted basis.
  • Total anticipated run-rate synergies of $2.1 Billion; expected to be accretive to KMB"s adjusted EPS by year 2.
  • Attractive financial profile. Based on current projections, the combined company would generate 2025 annual net revenues of approximately $32 billion and approximately $7 billion of adjusted EBITDA. Strong execution and synergy realization will position the combined company to achieve an industry-leading growth and financial profile. Kimberly-Clark is committed to maintaining a robust credit profile consistent with its current rating, with significant financial flexibility to drive strategic capital investment for long-term growth.
  • Clear path to strong cost and revenue synergies. Kimberly-Clark and Kenvue have identified approximately $1.9 billion in cost synergies and approximately $500 million in incremental profit from revenue synergies, partially offset by reinvestment of approximately $300 million. The cost synergies are expected to be captured in the first three years following closing, and the revenue synergies are expected to be captured within four years post close. Kimberly-Clark expects $2.5 billion of cash costs to achieve these synergies, invested within the first two years post close.
  • Compelling value creation for all shareholders. The transaction is expected to deliver immediate value creation to Kenvue shareholders from $6.8 billion in upfront cash consideration. The enhanced financial profile of the pro forma company is expected to deliver compelling value to all shareholders. The total consideration represents an acquisition multiple of approximately 14.3x Kenvue's LTM adjusted EBITDA2 or 8.8x including expected run-rate synergies of $2.1 billion, net of reinvestment.
  • As part of the transaction, Kimberly-Clark has received committed financing from JPMorgan Chase Bank, N.A. and intends to fund the cash component of the transaction consideration through a combination of cash from its balance sheet, proceeds from new debt issuance, and proceeds from the previously announced sale of a 51% interest in its International Family Care and Professional ("IFP") business.
  • The transaction is expected to close in the second half of 2026, subject to the receipt of Kenvue and Kimberly-Clark shareholder approvals, regulatory approvals and satisfaction of other customary closing conditions. As part of Kimberly-Clark's evaluation of this transaction, the Company carefully considered all risks and opportunities, working with some of the world's foremost scientific, regulatory, legal and other experts.
  • KVUE Reports Q3 (Sep) earnings of $0.28 per share, excluding non-recurring items, $0.02 better than the FactSet Consensus of $0.26; revenues fell 3.5% year/year to $3.76 bln vs the $3.82 bln FactSet Consensus.
  • KVUE reaffirms guidance for FY25, sees EPS of $1.00-1.05, excluding non-recurring items, vs. $1.03 FactSet Consensus. KVUE Net sales and Organic sales are expected to be down low-single-digits, assuming approximately neutral impact from foreign currency translation. Adjusted operating income margin is expected to decline year-over-year.