New Board Fighting Set To Impact Breakout Of Former Sound United Business
The knives have come out again at Masimo Corporation with serious questions now being asked as to what impact the bitter battle for control of the business, this will have on the former Sound United operation, and the recent spin off of Masimo Consumer brands Denon, Marantz and Bowes & Wilkins.
Over the Easter break it appears two sides were lining up against each other for control of the Masimo board on one side is Masimo founder and CEO Joe Kiani while on the other side is a bunch of money men and Politan Capital Management and its CIO Quentin Koffey.
Overnight Politan issued a public notice and SEC filing to put the company on notice it will seek to offer two more nominees for election to the Masimo Board of Directors at the upcoming 2024 Annual Meeting.
If successful Politan will have a total of four directors, and a majority on the Board.
Their aim is to get control of the Company following the spinning out of Masimo’s Consumer audio and health wear tracking business which is still going to need funding or be set up to be sold.
In issuing the notice Koffey made several claims about the running of the business with shares climbing 10% during the past month as the board drama unfolded.
Masimo management have issued a stern rebuttal to several allegations claimed by Politan Capital Management that the company has lost its way because of its costly diversion by CEO Joe Kiani after he acquired Sound United for $1.4 billion in 2022.
Koffey claims that Kiani’s decision to acquire Sound United was a mistake that has muddled the mission of a formerly successful professional healthcare products manufacturer, distracted management, and employees with the issues of a non-adjacent consumer audio products business and diminished the value of the stock.
Back in 2023 Koffey was able to get two of his nominations onto the board now he wants two more, in a move that if successful could see the dumping of Joe Kiani as CEO.
Overnight Koffey came out swinging, “alleging Board dysfunction, uncooperative management, and says Kiani’s desire for control ‘is troubling.’”
Which in itself is the pot calling the kettle black claims observers with Koffey clearly wanting control.
Koffey claims “Chairman & CEO Joe Kiani refused to give us basic information, denied us access to management, repeatedly held Board meetings excluding us, and refused to even consider allowing any review of capital allocation or strategy”.
Masimo management who currently control the board, have issued a point-by-point refutation of each and every one of Koffey’s allegations.
They even claim that Koffey’s lack of understanding of what he’s been provided is “concerning,” and provides a full exhibit of the titles of documents provided to Koffey and Michelle Brennan, as well as a list of executives that Koffey has met with and has ongoing access to.
They also claim that Koffey has not been truthful in his intent in creating waves at Masimo with Kiani supporters claiming that when the first two Politan nominees – Koffey and Brennan – were elected to the Board, Koffey “claimed to be seeking a minority voice on the Board from which to offer input and direction.” Yet the reality, Masimo says, is that “Koffey has always been intent on taking control.”
Documentation supplied by people fighting Koffey claim that he ‘Does not want an independent board he wants a Politan controlled board.
The current turmoil has not helped the management of the Masimo Consumer business who have had to contend with the majority of the board or two-thirds being turned over during the past nine months.
Overnight the Company claimed that ‘Masimo stockholders and the hundreds of millions of people who depend on Masimo innovation cannot afford the destructive and chaotic path that Mr. Koffey continues to pursue, even as the Company endeavours to separate its consumer business.”
The statement from management goes on to refute each and every allegation from Politan.