Glenview Capital Urges CVS Health to Implement Changes – Wall Street Journal

A prominent hedge fund investor is set to meet with senior executives at CVS Health to discuss strategies for enhancing the struggling healthcare group’s performance, according to reports.

Sources close to the situation indicate that this meeting might mark the beginning of Glenview Capital Management adopting an activist approach in its relationship with CVS Health.

Following the news, shares of CVS Health saw a rise in premarket trading. Glenview’s founder, Larry Robbins, has reportedly acquired a significant stake in the company, with CVS representing approximately $700 million of his $2.5 billion hedge fund portfolio, equating to around 1% of CVS’s outstanding shares.

Robbins is expected to engage with CVS’s CEO, Karen Lynch, and other executives to explore potential avenues for revitalizing the business, though discussions are not expected to involve breaking up the company.

CVS Health has not yet provided a public response to inquiries regarding the meeting.

Additionally, in the second quarter, Sachem Head Capital Management established a new stake in CVS Health following a sharp decline in its share price, holding about 2.45 million shares, which represents roughly 0.20% of the company.

Speculation surrounding the possibility of an activist investor influencing CVS to implement changes has increased, given that the stock has dropped over 24% in value this year. In August, CVS Health lowered its full-year profit forecast to between $6.40 and $6.65 per share, down from a previous estimate of at least $7.00, marking at least the fourth such adjustment this year.

Moreover, CVS Health has announced initiatives aimed at achieving $2 billion in cost savings through operational streamlining and the implementation of innovative technologies such as artificial intelligence and automation.