Activist Investors for CVS (CVS) Want the Company to Split Up

CVS Caremark Corp. (NYSE: CVS) could be worth $25 billion more if the company were to split itself up, according to investors SunAmerica Asset Management Corp. and Cambiar Investors, citied in a Bloomberg story.

Since acquiring Caremark RX Inc. in March 2007, shares of CVS are up just 3.4 percent, trailing the 14 percent gain seen in S&P 500 consumer staples companies.

Using the valuation of rivals Walgreen Co. (NYSE: WAG) and Express Scripts Inc. (Nasdaq: ESRX), a break-up would give the two CVS units a $73 billion value, or a 51 percent above the current price, according to data compiled by Bloomberg.

"They're under the gun and need to turn this around," said Maria Mendelsberg, a money manager at Denver-based Cambiar Investors which owns CVS shares. "If they were separate, the combination would be worth more than where the stock is today."

A spokeswoman at CVS said, "there are no plans to split up the company."

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Lowe's (LOW) PT Lowered to $275 at Guggenheim
• Buy this stock to gain "growing AI/HPC exposure": Barclays
• Klarna (KLAR) Reiterated at Market Perform by Citizens Amid Volume Headwinds