CVS Health’s board has enlisted advisors to conduct a strategic review of the business, according to individuals familiar with the matter, as the company faces potential activist pressure and a significantly depressed stock price.
The review has been ongoing for a while, these sources indicated, though it remains uncertain what actions, if any, will be taken by the company.
CVS Health’s management, including CEO Karen Lynch, met with major shareholder Glenview Capital on Monday to discuss the company’s underperforming prospects and Glenview’s suggestions for revitalizing the stock, as previously reported by CNBC.
Lynch is also dealing with challenges in the insurance business due to rising medical costs.
CVS spokesperson David Whitrap stated to CNBC, “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.”
The company has also been dealing with leadership changes. Earlier this year, Lynch took direct control of CVS’s insurance unit, replacing then-president Brian Kane.
Following the news, initially reported by Reuters, CVS shares increased approximately 2.5% in after-hours trading on Monday.
— CNBC’s Bertha Coombs contributed to this story.
