Major CVS shareholder plans activist push, will meet with management, sources say

Glenview Capital, a awesome CVS Health shareholder, is expected to meet alongside institution activity connected Monday to laic retired projected fixes for nan struggling business, according to group acquainted alongside nan matter, a imaginable precursor to an activistic push.

The hedge money has established a sizable position successful nan company, said immoderate of nan people. Glenview invests successful a assortment of sectors, but its astir caller regulatory filings show it holds positions successful Centene, CVS and Teva Pharmaceuticals among different names.

Specifics astir Glenview's proposals could not beryllium learned. The Wall Street Journal first reported that Glenview could beryllium gathering alongside CVS management, including CEO Karen Lynch.

Shares of CVS roseate much than 3% successful premarket trading Monday.

A CVS spokesperson said nan institution "maintains a regular speech alongside nan finance organization arsenic portion of our robust shareholder and expert engagement program."

"Beyond that, ourselves cannot remark connected engagement alongside circumstantial firms aliases individuals," nan spokesperson said."

CVS shares are down 22% year-to-date. The gathering alongside Glenview is not CVS' first brushwood alongside an activist. Earlier this year, Sachem Head Capital Management, nan well-known activistic money tally by Scott Ferguson, disclosed via regulatory filings that it had amassed a position successful nan company.

Jeff Smith's Starboard Value besides built a liking successful nan institution successful 2019, and engaged successful chat alongside nan company's activity arsenic well.

Investor assurance successful CVS has soured aft 3 consecutive quarters of full-year guidance cuts.

The company's bottommost statement is getting battered by higher aesculapian costs successful its security conception – an rumor dogging nan broader health-care manufacture arsenic much seniors acquisition procedures they had delayed during nan Covid-19 pandemic.

CVS owns Aetna, nan nation's third-largest wellness insurer by marketplace share, according to The American Medical Association. The company's security entity includes plans by Aetna for nan Affordable Care Act, Medicare Advantage and Medicaid, on alongside dental and vision.

In its second-quarter results successful August, CVS announced a activity shakeup based connected nan capacity and outlook of its security unit. The institution said CEO Lynch would replace nan president of nan segment, Brian Kane, effective immediately.

Meanwhile, CVS faces accrued unit successful its unit drugstore business. Reimbursement rates for medicine narcotics person plunged complete nan past respective years, during ostentation and softer user spending are making it difficult for CVS locations to rotate a profit astatine nan beforehand of nan store.

CVS successful August unveiled a caller scheme to trim $2 cardinal successful expenses complete respective years, that intent impact streamlining its operations and expanding nan exertion of artificial intelligence, among different efforts. The institution is besides wrapping upward a three-year scheme to adjacent 900 of its stores, alongside 851 locations closed arsenic of August.