Technology
Monday, March 25th, 2024 3:57 pm EDT
Key Points
- Masimo, a health-tech company known for its successful patent litigation over the Apple Watch, is facing its second proxy fight in two years from activist investor Quentin Koffey’s Politan Capital, which now holds a 9% stake and seeks to nominate two directors to the board.
- The announcement of Politan’s intention to nominate directors came just days after Masimo revealed plans to spin off an embattled business unit, causing shares to surge by up to 12% in Monday morning trading.
- Masimo’s decision to explore the spinoff of its audio unit, acquired in 2022 for $1 billion, triggered Politan’s initial proxy fight, with the activist investor now seeking additional board seats to ensure the spinoff proceeds as promised. If successful, Politan would control four out of six board seats, following its prior success in securing two board positions in the previous proxy battle.
Health-tech company Masimo, renowned for its victorious patent litigation involving the Apple Watch, finds itself embroiled in a second proxy fight within two years, this time instigated by activist investor Quentin Koffey’s Politan Capital, which now holds a 9% stake in the company and occupies a board position. Politan Capital intends to nominate two directors to Masimo’s board following the company’s recent announcement of plans to spin off a contentious business unit, causing shares to soar by up to 12%. Masimo’s decision to explore the spinoff of its audio unit, acquired in 2022 for $1 billion, stirred dissatisfaction among investors, triggering Politan’s initial proxy battle. Now, Politan seeks additional board representation to ensure the spinoff proceeds as promised, which the activist investor contends was hastily announced after Politan indicated its intention to pursue more board seats. Politan’s nominees, former Agilent executive Darlene Solomon and ex-Stryker CFO Bill Jellison, bring expertise in research and development and mergers and acquisitions, respectively. If successful, Politan would wield significant influence with four out of six board seats. In the prior proxy fight, Koffey and healthcare executive Michelle Brennan secured board positions, despite Masimo’s resistance tactics, including attempts to compel activists to disclose investment details before nominating directors. Koffey expressed disappointment with Masimo’s board, accusing CEO Joe Kiani of obstructing communication and access to management. Masimo, however, contends that discussions regarding the separation began in January, with input from board members, including Koffey. The proposed spinoff aligns with Masimo’s commitment to review its consumer business strategy within three years of the Sound United acquisition.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/25/activist-investor-plans-second-fight-at-masimo-sending-shares-up-12percent.html
