Table of Contents
WOONSOCKET, R.I. — Leading officials of CVS Health were to meet Monday with an investor who is proposing operational upgrades for the company, the Wall Street Journal reported.
Larry Robbins, founder of health care-oriented hedge fund Glenview Capital Management, is said to have a significant portion of the fund's holdings in CVS. The meeting reportedly could presage an activist engagement from him in dealings with the company.
Robbins was to meet with CVS chief executive Karen Lynch to present proposals to energize the company but not break it up, the report in the Wall Street Journal said.
CVS Health Corp.'s stock rose 1.7% Monday after a report surfaced of a meeting.
WSJ's sources said the meetings Monday indicate that Robbins thinks that CVS can right the ship and that he will be able to push its leadership toward new approaches. Robbins has also played the role of activist investor in other instances, including when he recently put pressure on Tenet Healthcare to remove four of its board members.
"CVS Health’s management team and Board of Directors are continually exploring ways to create shareholder value. We remain focused on driving performance and delivering high quality healthcare products and services enabled by our unmatched scale and integrated model," said David Whitrap, vice president, External Affairs at CVS Health.
"Our industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance. As we previously disclosed, we’ve embarked on a multi-year initiative to deliver $2 billion in cost savings by reducing expenses and investing in technologies to enhance how we work," said Whitrap.
"To achieve this goal and position ourselves for sustainable growth, we will reduce our workforce by less than 1% (roughly 2,900 jobs). Impacted positions are primarily corporate roles; the reductions will not impact front-line jobs in our stores, pharmacies, and distribution centers," he added.
"Before taking this step, we prioritized finding cost saving everywhere we could, including closing open job postings. Decisions on which positions to eliminate were extremely difficult and do not diminish the value that impacted colleagues have brought to the company. We are committed to supporting these colleagues, who will receive severance pay and benefits, including access to outplacement services. The vast majority of impacted colleagues will be notified this week. We remain focused on our mission – continuing to provide the exceptional care and support our patients, members, clients and customers deserve and depend on," Whitrap concluded.
