Masimo prepared to provide one board seat if activist Politan drops proxy contest

By Thomson Reuters May 9, 2024 | 12:32 PM

(Reuters) -Masimo 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.

In late March, Politan, which owns a near 9% stake in Masimo, had nominated Jellison, former CFO of Stryker, and Darlene Solomon, former CTO of Agilent Technologies, as its candidates to Masimo’s six-member board.

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.

“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.

Politan Capital Management did not immediately respond to a request for comment.

Shares of Irvine, California-based Masimo were up more than 5% in afternoon trade.

(Reporting by Christy Santhosh in Bengaluru; Editing by Shailesh Kuber)