Starboard Value Buys a Stake in the Pharmacy Benefits Giant

CVS Health has a new activist investor circling around it. The Wall Street Journal reported Monday that Starboard Value has purchased a stake in the pharmacy and health benefits giant. Reports indicate that Starboard has a small stake in CVS and that management has already discussed the company’s future with the hedge fund. The news was sudden as a recent 13-F from Starboard Value did not reveal the stake in the company.

CVS Health and Its New Activist

CVS Health has seen shares run up sharply over the last few weeks. However, shares are still off about 2% in the last 52 weeks. The company has also faced challenges from broader macroeconomic developments and concerns about its long-term care business. That said, the company has engaged in a turnaround program designed to help cut costs and integrate Aetna. CVS Health purchased the health insurance giant in 2018 for $70 billion.

Other Activist Pressures

Meanwhile, CVS isn’t the only company dealing with activist investors on Tuesday. This week, Reuters reported that hedge fund Luminus Management is pushing for changes at Valaris. The activist fund is pushing for a special shareholder meeting to discuss changes at the offshore contract drilling services company. Further, Valaris shares rallied Tuesday after the fund called on a shake-up to the firm’s board of directors, governance practices, and operations.

A regulatory filing also said Luminus wants management to “take a holistic and balanced approach to managing (it’s) capital structure, with a specific focus on ensuring liquidity, pushing out debt maturities and effectively monetizing debt discounts.”

Related: Study: Activist Investing Spurs Innovation in Targeted Companies