Oak Street Health (NYSE:OSH) shares surged 36% after a Bloomberg report that CVS (NYSE: CVS) is exploring options to buy the health care company for more than $10 billion. CVS stock ticked down about 0.5% on the news.
Bloomberg reported late Monday that CVS, which has been expanding into the healthcare sector as its retail sales growth slows, has been in talks with the Chicago-based Oak Street, which went public in 2020.
The deal, for both Oak Street's equity and debt, would likely rise past $10 billion if completed, and added to CVS's recent acquisition of Signify Health
CEO Karen Lynch told the JPMorgan healthcare conference in San Francisco yesterday that CVS Health expects to exceed its full-year revenue forecast of between $309 billion and $314 billion, with adjusted earnings at the higher end of its prior $8.55 to $8.65 per share forecast.
CVS Health Corp lifted its full-year profit forecast in early November following better-than-expected third quarter earnings that offset the impact of a $5 billion agreement to settle lawsuits linked to the U.S. opioid crisis.
The agreement with various state attorneys general will see the group pay around $5 billion over the next ten years, beginning in 2023, to resolve litigation linked to the country's opioid crisis.
CVS said adjusted earnings for the three months ending in September were pegged at $2.09 per share, up 6.1% from the same period last year and 10 cents ahead of the Street consensus forecast, while group revenues rose 10% to $81.2 billion.
OSH shares leaped $6.13, or 27.2%, to $28.70, while those for CVS fell $2.47, or 2.7%, to $89.02
