VF Corp. on Tuesday announced that its board of directors has approved the previously announced separation of VF’s Jeanswear organization into an independent, publicly traded company.
The new company, named Kontoor Brands Inc., will include the Wrangler, Lee and Rock & Republic brands, and the VF Outlet business. Scott Baxter, pictured left, will be CEO.
The separation will be achieved through the distribution of 100 percent of the shares of Kontoor Brands to holders of VF common stock. VF shareholders entitled to receive the distribution will receive a book-entry account statement or a credit to their brokerage account reflecting their ownership of Kontoor Brands common stock.
The distribution of Kontoor Brands’ shares is expected to be completed after the market close on May 22, 2019, with VF shareholders receiving one share of Kontoor Brands common stock for every seven shares of VF common stock held at the close of business on the record date of May 10, 2019. Fractional shares of Kontoor Brands common stock will not be distributed. Any fractional share of Kontoor Brands common stock otherwise issuable to a VF shareholder will be sold in the open market on such shareholder’s behalf, and such shareholder will receive a cash payment for the fractional share based on its pro rata portion of the net cash proceeds from all sales of fractional shares.
Following the distribution of Kontoor Brands’ common stock on May 22, 2019, Kontoor Brands will be an independent, publicly traded company. Kontoor Brands has received approval for the listing of its common stock on the New York Stock Exchange under the symbol “KTB.”
Prior to the distribution, VF expects to mail an information statement to all shareholders entitled to receive the distribution of shares of Kontoor Brands’ common stock. The information statement will describe Kontoor Brands, including the risks of owning Kontoor Brands’ common stock and other details regarding the spin-off.
The completion of the distribution is subject to a number of customary conditions, including the Securities and Exchange Commission (SEC) having declared effective Kontoor Brands’ Registration Statement on Form 10, as amended, which Kontoor Brands has filed with the SEC and is available at the SEC’s website at http://www.sec.gov.
VF expects to receive an opinion from its tax advisors confirming the tax-free status of the spin-off to VF and its stockholders (except to the extent of cash received in lieu of fractional shares).
VF expects that a “when-issued” public trading market for Kontoor Brands’ common stock will commence on or about May 9, 2019 under the symbol “KTB WI,” and will continue through the distribution date. VF also anticipates that “regular-way” trading of Kontoor Brands’ common stock will begin on May 23, 2019, the first trading day following the distribution date.
Beginning on or about May 9, 2019, and through the distribution date, it is expected that there will be two ways to trade VF common stock – either with or without the distribution of Kontoor Brands’ common stock. VF shareholders who sell their shares of VF common stock in the “regular-way” market (that is, the normal trading market on the NYSE under the symbol “VFC”) after the record date and on or prior to the distribution date will be selling their right to receive shares of Kontoor common stock in connection with the spin-off. It is anticipated that shares of VF common stock will also trade ex-distribution (that is, without the right to receive the Kontoor Brands distribution) during that period under the symbol “VFC WI.” Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling shares of VF common stock on or before the distribution date.
Barclays acted as financial advisor to VF regarding the spin-off.
