Politan Capital Management, led by Quentin Koffey, is gearing up to enhance its influence within Masimo Corporation by proposing the addition of two more directors to the medical device manufacturer’s board.
This initiative follows Politan’s successful attainment of two board seats during last year’s annual meeting, including one for Koffey himself, leveraging its roughly 9% stake in Masimo since 2022.
Masimo, renowned for its hospital monitoring technologies like pulse oximeters, commands a market valuation of about $7.1 billion. The activist investor’s pursuit of board expansion underscores its persistent strategy to assert greater control, potentially steering the company in alignment with its vision for Masimo’s future.
Strategic Shifts and Market Response
Masimo’s strategic decision in 2022 to acquire a consumer-technology company specializing in high-end audio equipment for around $1 billion was met with skepticism from analysts and investors, leading to a significant drop in the company’s stock value.
Masimo’s founder and CEO, Joe Kiani, defended the acquisition, stating it provided access to retail channels and diversified the company’s product range to include consumer items like baby monitors and smartwatches.
In a recent development, Kiani announced plans to explore the separation of Masimo’s consumer business, focusing the company more on its core professional healthcare and telehealth products. This announcement was positively received by the market, with Masimo shares surging more than 10% in after-hours trading.
Governance Concerns and Proxy Battles
In light of Politan’s endorsement of a review of Masimo’s consumer business, there exist reservations concerning the company’s dedication to executing a thorough separation process and upholding overarching corporate governance standards.
Politan has conveyed concerns about feeling sidelined by Kiani since becoming a member of the board. The impending election of board directors, which includes Kiani’s position, introduces another dimension of intricacy to the ongoing power dynamics within Masimo.
The candidates proposed by Politan, notably William Jellison, a former CFO of a medical device manufacturer, exemplify the hedge fund’s determination to instigate substantial alterations in Masimo’s governance and strategic trajectory.
