A major CVS shareholder is planning an activist push and will meet with management, according to sources.

• According to sources, Glenview Capital has accumulated a substantial share in CVS Health and intends to meet with the company's top management to present its strategy for adding value.
• An activist push at the company is anticipated to follow the proposal, according to the people.
• CVS shares are down 22% year-to-date.

According to sources, Glenview Capital, a significant shareholder, will meet with company leaders on Monday to present solutions for the ailing business, which could signal the start of an activist campaign.

Some sources claim that the hedge fund has a significant stake in the company. Glenview has a diverse investment portfolio, but its recent filings reveal that it holds positions in CVS, among others.

The Wall Street Journal reported that Glenview would be meeting with CVS management, including CEO Karen Lynch, but specifics about their proposals could not be learned.

The spokesperson for CVS stated that the company consistently communicates with the investment community as part of its comprehensive shareholder and analyst relations program.

"The spokesperson stated that they cannot provide any information about engagement with specific firms or individuals beyond what has already been stated."

Earlier this year, Sachem Head Capital Management, an activist fund run by Scott Ferguson, disclosed that it had amassed a position in CVS.

In 2019, Jeff Smith's Starboard Value constructed a position in the company and conversed with its leadership.

After three consecutive quarters of reduced full-year guidance, investor confidence in CVS has decreased.

The insurance segment of the company is facing higher medical costs, which is affecting its bottom line. This issue is prevalent in the broader health-care industry due to the increase in seniors undergoing delayed procedures during the Covid-19 pandemic.

Aetna, the third-largest health insurer in the US, is owned by CVS. Its insurance unit offers plans for the Affordable Care Act, Medicare Advantage, Medicaid, as well as dental and vision coverage.

In August, CVS announced a leadership shakeup in its insurance unit, with CEO Lynch replacing Brian Kane, the president of the segment, effective immediately.

The retail pharmacy business of CVS is under pressure due to declining reimbursement rates for prescription drugs, rising inflation, and decreasing consumer spending.

In August, CVS announced a plan to reduce expenses by $2 billion through streamlining operations and increasing AI usage, while also closing 900 stores, with 851 locations already shut down.