Masimo has asked a federal court to intervene in its ongoing proxy fight with Politan Capital Management, with a lawsuit that seeks to force the activist investor to “correct material misstatements and omissions” in its materials sent to shareholders, the company said.
At the same time, Masimo is pushing back its scheduled annual meeting and vote, from July 25 to September 19, to give investors time to review any changes. Because of the move, any previously submitted proxy votes will be disregarded, the company said, and all shareholders will need to resubmit their ballots.
The complaint, filed in central California federal court, casts Politan’s managing partner and chief investment officer, Quentin Koffey, as “avaricious” and accuses him of working to “improperly gain control of the Company.”
“Koffey is desperate to take control of Masimo at any cost, for personal gain and to the ultimate detriment of the Company and long-term stockholder value—using lies, misrepresentations, mischaracterizations, and deceit, as well as misusing confidential Company information he gained from inside the Masimo boardroom itself. And it appears to be working,” Masimo said in its lawsuit—citing recent missives from the proxy advisory firms ISS and Glass Lewis that urged shareholders to elect Politan’s two nominees to the company’s board of directors, per reports from CNBC.
With the two Politan board members that were named to Masimo’s board in 2023—including Koffey and Michelle Brennan, a former executive at Johnson & Johnson—the addition of two more would give Politan directors a majority, and would remove the company’s founder and CEO, Joe Kiani.
The lawsuit also offers a view into boardroom discussions on the planned spinout of its consumer products businesses—a pitch that Masimo originally credits to Koffey—spanning its high-tech baby monitors and smartwatches, as well as the portfolio of home audio brands the company picked up through its $1 billion purchase of Sound United, including Marantz, Denon, Polk and more.
Masimo claims that Politan’s proxy materials misled shareholders on topics ranging from the oversight of the proposed company split—and a scuttled joint venture with a potential buyer—to the conduct and onboarding of Koffey and Brennan following their election as directors.
In response, Politan described the lawsuit as part of "Masimo’s latest entrenchment maneuvers.”
“This is not about Politan’s proxy materials. There are no misstatements,” Koffey said in a release. “The reality is that moving the Annual Meeting—which was scheduled to be held in nine days—back two months is nothing more than a desperate attempt to prevent the voices of Masimo’s shareholders from being heard.”
“Despite Masimo’s bylaws and Delaware law requiring the Company hold an Annual Meeting within 13 months of the last one, Mr. Kiani is delaying the Annual Meeting to a date 15 months past the last meeting, and he has calculated that the time it takes for Politan to go to court and compel a meeting could allow him to get away with such a substantial delay,” he said.
Politan said it would work to make sure the annual meeting is held no later than September 19, or potentially before.
Earlier this month, nearly 300 of Masimo’s engineers and global managers signed on to letters saying they might follow Kiani out the door if he is ousted from his position.