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Politan Capital, led by Quentin Koffey and holding approximately 9% of Masimo’s shares, announced its intention to nominate two directors to Masimo’s board shortly after the company revealed plans to spin off a troubled business unit.
The announcement led to a surge in Masimo’s shares during Monday morning trading, with the stock closing up around 3%.
Masimo had recently disclosed its consideration of spinning off its audio unit, which it acquired in 2022 for $1 billion. The acquisition, perceived by some investors as unrelated to Masimo’s core health-tech focus, had triggered Politan’s initial proxy fight with the company.
Now, Politan aims to secure two additional board seats to ensure the execution of the spinoff, which it claims was hastily announced after Politan informed the company of its intention to seek additional board seats.
However, Masimo refuted this narrative, asserting that Politan rushed the announcement of its candidates to capitalize on the positive market reaction to the separation plan.
Politan’s nominees for the board seats are Darlene Solomon, a former executive at Agilent, and Bill Jellison, the former Chief Financial Officer of Stryker. Solomon brings expertise in research and development from her tenure at Agilent, while Jellison contributed to driving Stryker’s merger and acquisition strategy.
If successful, Politan would control four out of the company’s six board seats.
In the previous proxy fight, Politan secured two board seats for Koffey and healthcare executive Michelle Brennan. The intense battle drew widespread attention, with Masimo employing unconventional tactics to fend off Politan’s advances.
Koffey expressed disappointment at Masimo’s resistance to collaboration, citing the company’s refusal to provide basic information, denial of access to management, and exclusion from board meetings.
Despite Politan’s hope to avoid another proxy fight, Masimo remains steadfast in its commitment to its strategy, highlighting ongoing discussions regarding the separation plan dating back to January.
Masimo’s spokesperson emphasized that the board, including Quentin Koffey, has been actively engaged in discussions related to the separation strategy, with a significant portion of the board joining within the past nine months.
Additionally, Masimo reiterated its commitment to reassessing the $1 billion Sound United strategy within a three-year timeframe.