Masimo activist director Koffey demands ‘basic’ information on company’s proposed spinoff

Politan Capital’s Quentin Koffey contacted Masimo CEO Joe Kiani on Wednesday to inquire about the health-tech company’s plans to spin off its consumer division.

Koffey, who was elected to Masimo’s board in a proxy fight last year, stated that despite his “repeated requests,” he has “not received information as basic and fundamental as even the name of the contemplated JV partner,” weeks after the company first revealed it was considering a split.

Masimo paid $1 billion for consumer audio business Sound United in 2022, resulting in a 37% decline in its stock price on the day of the announcement. The purchase sparked Politan’s first proxy struggle at the corporation.

Last month, Masimo announced the spinoff of its consumer division, which sparked a market rise.

In his letter, Koffey stated that Masimo management has requested “that directors sign a non-disclosure agreement” in order to have access to deal-related material. Koffey, who is preparing for a second proxy campaign to gain complete control of Masimo’s board, warned Kiani that if the firm delayed or denied his request, he would seek legal action.

The activist is also looking for information on any financial and leadership prospects that Kiani has been promised at the spinoff. According to Masimo’s most current guidance, the business units it proposes to spin off are expected to produce $700 million to $780 million this year.

During a call with analysts on Tuesday, Masimo CFO Micah Young stated that executives are working “diligently” and would report their findings on the deal structure and joint venture partner to the complete board in the coming months.

Politan’s spokeswoman declined to comment beyond the letter’s text. Masimo representatives were not immediately available for comment.

Politan is Masimo’s second-largest stakeholder, with around 9% shareholding, after only Fidelity. Kiani is the company’s largest individual investor, with a 7.5% share.

Masimo’s stock is up 2.4% this year, closing Wednesday at $120.02. They fell 49% in 2022 and an additional 21% last year.