Dive Brief:

• Masimo said last week that new potential acquirers have shown interest in its consumer audio brands. The would-be suitors emerged as Masimo conducted exclusive talks with a possible joint venture partner for its consumer audio and health businesses.
• The exclusivity period with the joint venture candidate was extended to mid-August but has now expired, opening the door to discussions with other suitors, Masimo said in an Aug. 16 securities filing.
• The company said it plans to begin talks with the parties through its financial adviser, Morgan Stanley, while continuing to negotiate with the potential joint venture partner.

Dive Insight:

Masimo, a medical device maker best known for its pulse oximetry technology, in March unveiled plans to separate its consumer business. The move came just two years after Masimo bought a portfolio of home audio brands, including Denon and Marantz, from Sound United for $1 billion.

The Sound United acquisition ignited a proxy battle led by activist investor Politan Capital that landed two Politan-backed nominees on Masimo’s board of directors in 2023. Politan is aiming to gain two more board seats this year as it vies for control of Masimo and seeks to oust longtime CEO and founder Joe Kiani.

Masimo now finds itself pursuing a separation of the consumer business while fending off Politan’s proxy challenge. In July, Masimo disclosed it received an offer of up to $950 million for the business, but planned to negotiate for a higher price.

The separation originally was expected to include the Stork baby monitor, Freedom smartwatch and audio products.

Masimo said in the latest securities filing it has been talking to the joint venture candidate about selling a majority stake of its consumer audio and consumer health businesses to the venture. The potential partner would make a cash payment to Masimo and contribute cash to the joint venture.

Meanwhile, Masimo received separate unsolicited requests from potential acquirers interested in the consumer audio business.

The company said its options include a joint venture, spin off of the consumer business into a public company or sale of all or part of the consumer business. 

Under all scenarios, Masimo would retain its professional healthcare and telehealth/telemonitoring products.

In July, Masimo postponed its annual shareholder meeting until September and filed a lawsuit against Politan in a bid to require the hedge fund to correct what Masimo considers misstatements in proxy documents.