World Courant
The CVS Pharmacy brand is seen on the retailer in Florida Keys, United States on Might 7, 2024.
Jakub Porzycki | Nurfoto | Getty Photos
Glenview Capital, a significant CFS well being shareholder, is anticipated to fulfill with firm management on Monday to hammer out proposed options for the struggling firm, in keeping with individuals accustomed to the matter, a possible harbinger of an activist push.
The hedge fund has acquired a major place within the firm, some individuals stated. Glenview invests in a wide range of sectors, however its most up-to-date filings present it’s taking positions CenteneCFS and Teva Prescription drugs beneath different names.
Particulars about Glenview’s proposals couldn’t be discovered. The Wall Road Journal first reported that Glenview would meet with CVS administration, together with CEO Karen Lynch.
A CVS spokesperson stated the corporate “maintains a daily dialogue with the funding group as a part of our strong shareholder and analyst engagement program.”
“Moreover, we can not touch upon involvement with particular firms or people,” the spokesperson stated.
CVS shares are down 22% this yr. The assembly with Glenview will not be the primary assembly between CVS and an activist. Earlier this yr, Sachem Head Capital Administration, Scott Ferguson’s well-known activist fund, introduced through regulatory filings that it had acquired a place within the firm.
Jeff Smith’s Starboard Worth additionally constructed a stake within the firm in 2019 and was additionally in discussions with the corporate’s management.
Investor confidence in CVS has deteriorated after three straight quarters of full-year forecast cuts.
The corporate’s backside line has been battered by increased medical prices within the insurance coverage phase – a problem that’s dogging the broader healthcare business as extra seniors bear procedures they’d postpone throughout the Covid-19 pandemic.
CVS owns Aetna, the nation’s nation third largest well being insurer based mostly on market share, in keeping with The American Medical Affiliation. The corporate’s insurance coverage unit contains Aetna plans for the Inexpensive Care Act, Medicare Benefit and Medicaid, together with dental and imaginative and prescient.
In its August second-quarter outcomes, CVS introduced a management change based mostly on the efficiency and prospects of its insurance coverage unit. The corporate stated CEO Lynch would exchange the phase’s president, Brian Kane, efficient instantly.
In the meantime, CVS is going through rising strain in its retail pharmacy enterprise. Prescription drug reimbursements have fallen sharply lately, whereas inflation and decrease shopper spending make it troublesome for CVS places to make a revenue on the entrance of the shop.
CVS unveiled a brand new plan in August to chop $2 billion in bills over a number of years, which incorporates streamlining operations and rising the usage of synthetic intelligence. The corporate can be finalizing a three-year plan to shut 900 of its shops, with 851 places closed as of August.
Main CVS shareholder plans activist push, meets with executives: sources
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