Kimberly Clark Health Care Spinoff Months Away
Kimberly Clark shares dropped slightly Friday morning after the company said during a press call that the potential spin off of its healthcare division still needs board approval and would not occur for several months.
The stock had climbed late Thursday to a record high of $111.68 after news broke that the company - which makes Kleenex tissues and Huggies diapers - plans to shed its health-care division, K-C Health.
K-C Health, which makes sterile wraps, surgical masks and catheters, brought in 7.7 percent of the company's $21.1 billion in net sales last year.
"This is the most independent of all of our business, it has the least overlap and so I think it will be relatively easier than others to separate," Paul Alexander, vice president of investor relations, said on a call with analysts on Friday.
If approved by the board, the spin off would be completed by the third quarter of 2014, at which point the stand-alone, publicly traded company's shares are expected to be distributed, tax free, to existing Kimberly Clark shareholders.
But before the board can approve the move, Kimberly Clark has to finalize tax forms and its management team, the company said.