Dive Brief:
- Masimo on Tuesday said it postponed its annual shareholder meeting until September and filed a lawsuit against Politan Capital Management in a California federal court seeking to require the activist investor to correct material misstatements in its proxy documents.
- Masimo said the complaint also alleges Quentin Koffey, who is leading a campaign to oust CEO Joe Kiani, has assisted in litigation against the company. Koffey is Politan’s chief investment officer and won a seat on Masimo’s board last year.
- The latest salvo in the bitter battle between Masimo and Politan comes after proxy advisory firm ISS on Monday joined Glass Lewis in recommending Masimo shareholders support both Politan nominees for election to the patient monitoring company’s board at the annual meeting.
Dive Insight:
As rhetoric from both sides heats up, Masimo in a securities filing Tuesday said it postponed the July 25 annual meeting to accommodate Politan’s request for a new record date and to ensure shareholders have time to review revised proxy materials. The meeting is now planned for Sept. 19, with a record date of Aug. 12.
Masimo founder Kiani is up for reelection to the board, and the company has nominated Christopher Chavez, former CEO of medtech companies Trivascular and Advanced Neuromodulation Systems, for an additional seat.
Politan has nominated Darlene Solomon and William Jellison for board seats. Solomon is Agilent Technologies’ former chief technology officer and Jellison is Stryker’s former CFO.
Responding to what it called Politan’s “most egregious” misrepresentations, Masimo on Monday said the hedge fund and Koffey continue to “sow mistrust and confusion” about a proposed joint venture for Masimo’s consumer business.
Politan has criticized Masimo’s $1 billion acquisition of consumer audio company Sound United in 2022. Masimo now plans to separate its consumer operations and disclosed earlier this month that it received an offer of up to $950 million for the business.
Politan has alleged that the proposed joint venture would benefit Kiani at the expense of other shareholders and that the CEO refused to allow the board to consider selling the consumer audio business alone. However, Masimo has refuted those claims.
The proxy advisory firms’ concerns echo those of Politan. In recommending Politan’s board candidates, ISS pointed to a "dangerous lack of accountability" on the current Masimo board and said change was "absolutely necessary" to protect shareholder value.
Glass Lewis, in a report shared with MedTech Dive, cited cause to conclude the board remains committed to oversight methods that have enabled wide operational misses, “nil-return strategic excursions" and “profound damage to shareholder value.”
The proposed business separation raises the stakes in the battle, Glass Lewis wrote.
“Investors have no reason to believe the existing board is prepared to thoroughly and independently monitor this process,” Glass Lewis wrote in its report.
Hundreds of Masimo employees have voiced public support for Kiani in the midst of the proxy fight, with Chief Operating Officer Bilal Muhsin saying he would step down if the CEO is removed.
BlackRock and FMR are the two leading shareholders in Masimo, followed by Politan and The Vanguard Group, according to the Glass Lewis report. Kiani is the fifth largest shareholder in the company.
