U.S. Markets closed

CVS Gains After Report Activist Starboard Took Small Stake

Robert Langreth

(Bloomberg) -- Shares of CVS Health Corp. rose after a report that activist investment firm Starboard Value LP had taken a small stake in the drugstore chain and held talks with management.

Shares of the company, which runs almost 10,000 drugstores across the U.S., closed up 1.7% Monday after the Wall Street Journal’s report.

The Journal described the stake in CVS as small, and said the two firms had held amicable discussions. CVS declined to comment. Representatives for Starboard didn’t immediately respond to requests for comment.

CVS, which has a market value of roughly $99.6 billion, would be a big target for Starboard. The New York hedge fund hasn’t shied away from mammoth targets though. Earlier this year, for example, it built a small position in Bristol-Myers Squibb Co. in a failed attempt to block its takeover of Celgene Corp.

CVS has been transforming itself into a vertically integrated health-care company, with a pharmacy-benefit management unit and a health insurer, Aetna. It’s also transforming some of its stores into so-called health hubs, where people can get medical services.

(Updates with CVS declining to comment in third paragraph)

--With assistance from Scott Deveau.

To contact the reporter on this story: Robert Langreth in New York at rlangreth@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett, Mark Schoifet

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.