Masimo prepared to provide one board seat if activist Politan drops proxy contest
Adds Politan's response in paragraph 4, 6, 8 and 9
By Christy Santhosh and Pratik Jain
May 9 (Reuters) -Masimo MASI.O said on Thursday that it is prepared to appoint Politan Capital Management's nominee William Jellison as a director on its board, if the activist investor withdraws its other nominee and drops its proxy contest.
Quentin Koffey-owned Politan has long criticized Masimo's capital allocation and board oversight and expressed particular concern about its $1 billion purchase of consumer audio products maker Sound United in 2022.
In a letter addressed to Koffey, Masimo's director Craig Reynolds said a settlement would ensure that the company isn't distracted by a proxy contest as it evaluates the proposed separation of its consumer business announced on March 22.
The proposal falls well short of resolving the fundamental governance problems at Masimo, Koffey said in his response addressed to Reynolds.
In late March, Politan, which owns a near 9% stake in Masimo, had nominated Jellison, former CFO of Stryker SYK.N, and Darlene Solomon, former CTO of Agilent Technologies A.N, as its candidates to Masimo's six-member board.
"Masimo needs a majority of truly independent directors. There is a straightforward and clear solution, add Darlene Solomon and Bill Jellison to company's board immediately", the veteran fund manager's letter stated.
Politan had said it supported the separation of the consumer business, but was seeking the two seats, in addition to the two seats it won last year, for more oversight over the process.
Koffey said on Thursday that adding the two Politan nominated directors would avoid a deadlocked board and finally fulfill Masimo's promise to expand it to seven members.
Politan will not oppose the re-election of Joe Kiani, chairman & CEO of Mamiso, to the board, the activist investor added.
"We have a clear path towards maximizing stockholder value through a separation of the consumer business approved by an independent board, 50% of which (3 of 6 directors) would be Politan-nominated directors" Masimo said in its letter.
The consumer business includes Masimo's consumer health and audio products.
Shares of Irvine, California-based Masimo rose 3.5% in extended trading.
Reporting by Christy Santhosh and Pratik Jain in Bengaluru; Editing by Shailesh Kuber
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
