CVS is being eyed by activist investor Starboard Value.
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Dow Jones is reporting the firm took a stake in the drugstore chain and that the stake is "relatively small and the talks are amicable," according to the report.
Shares got a pop on the news.
The news also comes amid reports that Walgreens is exploring going private in what would be the biggest leveraged buyout in history valued at a reported $50 billion, although some analysts say the deal could be even higher.
Drugstore retailers, many of which offer in-house health care clinics, are feeling the competition from the likes of Amazon and other online drug retailers that offer competitive prices for prescriptions among other health care items.
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“We talk a lot about prescription drug prices,” CVS CEO Larry Merlo said during a recent interview with FOX Business’ Jack Otter on “Barron’s Roundtable.” “One of the things that we've been able to do is take your individual benefit design and put it into the physician's office as part of your electronic health record.”
CVS shares have gained 15 percent this year, trailing the S&P's 25 percent rise. Shares of Walgreens have dropped 11 percent over the same time frame and Rite Aid shares are off 32 percent.
Merger and acquisition activity has heated up in the past few weeks, with Charles Schwab and TD Ameritrade confirming their $26 billion tie-up today.
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Starboard Value has also been involved in another consumer stock: Papa John's. In February 2019, Starboard Value made a $200 million investment in the company in exchange for two new board seats, which put CEO Jeff Smith at the helm of the board. It then proceeded to shake up top management, including bringing in a new CEO.
Emails from FOX Business to Starboard were not returned at the time of publication. CVS declined to comment.