Politan Provides Update on Why Masimo Shareholders Should Support Urgently Needed Board Change at Company’s 2024 AGM
Sends Letter to Shareholders Reiterating Why Voting for Both Politan’s “Highly Credible and Capable” Nominees Is Essential in Order to Safeguard Shareholder Value and Realize
Highlights Key Facts Brought to Light During Discovery Process and Remains Confident That Masimo’s Frivolous Legal Claims and Efforts to Reject Politan’s Nomination Notice Will Be Defeated
Shareholders Can Vote for Politan’s Independent Nominees,
Masimo’s Annual Meeting is currently scheduled for
The full text of the letter is below:
Dear Fellow Masimo Shareholders,
Politan owns 9% of Masimo – an approximately
We previously laid out the detailed case in our
In July, only nine days before shareholders were scheduled to vote at Masimo’s Annual Meeting,
In its “lopsided” report in support of Politan’s nominees,
- “Moreover, like last year, Kiani and his cohort have adopted defensive rhetoric that reflects disregard for shareholders. In summary, they have continued their established pattern of presenting arguments that they apparently think will resonate with the investor base, but that crumble under basic scrutiny.”
- “…[S]hareholders have no reason to believe that management can be trusted to structure a pivotal transaction (to separate Masimo’s consumer business) on their behalf without the safeguard of further board independence. Thus, change is not only warranted on the basis of fundamental corporate governance failings, but is absolutely necessary to ensure that the separation does not compromise shareholder value.”
- “[Masimo] has a corporate governance track record that is firmly among the most troubling of any modern public company.”
- “…Kiani has demonstrated that he has no regard for public shareholders. He has been at the center of so many corporate governance scandals and abuses that no credible argument exists to the contrary.”
Similarly, in an analysis described as “scathing” in its criticism of Masimo and which offered full support for Politan’s nominees,
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“…[T]here remains a wealth of evidence to suggest operational and strategic execution, shareholder value and fundamentally sound corporate governance continue to take a back seat to the espoused preferences of
Mr. Kiani , who continues to run roughshod over a largely self-selected board seemingly disinterested in basic accountability and effective oversight.”
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“…[W]e ultimately find both
Mr. Jellison andDr. Solomon to be highly credible and capable candidates bringing appropriate industry expertise, potentially critical M&A/IP knowledge and reasonable public board experience (including relevant committee service). We believe there is suitable cause to conclude these nominees will act independently and that neither candidate is beholden to the interests of Politan orQuentin Koffey .”
Concurrent with delaying the Annual Meeting, Masimo filed a meritless lawsuit against Politan in
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Discovery has shown Masimo’s central accusation is false, based on “quadruple hearsay,”3and their “witnesses” do not even exist: The Company initially alleged – including in press releases and communication with the media – that
Mr. Koffey was conspiring with the Wolf Haldenstein law firm to assist in litigation against Masimo. During the course of discovery, it has been revealed that there was no credible evidence to support this charge. In fact, Masimo and its affiliates made this defamatory claim even though the Company, its lawyers, the opposition research/PR firm they retained and the private investigator they hired, did not know the identity of the confidential witnesses who were the basis for the accusation. That is because these witnesses do not exist. The Company is now seeking to paint Politan’s use of standard “expert network” firms, like AlphaSights, for investment due diligence as a nefarious act – an equally desperate claim that once again lacks any factual basis.
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Definitive evidence exists regarding Mr. Kiani’s role in RTW’s empty voting scheme: Masimo has denied any knowledge of the plan carried out by Mr. Kiani’s friends at RTW to manipulate the outcome of the election by voting shares in which RTW had no economic interest. Notably, Glass Lewis wrote in its report that if additional evidence emerged demonstrating Masimo was aware, it would be a “highly inappropriate manipulation of the shareholder franchise and a severe indictment of Masimo's credibility and corporate governance.”
The discovery process revealed multiple texts and calls, as well as communications on encrypted applications like WhatsApp, betweenMr. Kiani and the executives at RTW in charge of voting the firm’s Masimo position. The communications showMr. Kiani and his advisors not only knew about RTW artificially inflating its vote totals to ~10% through empty voting, but also knew how much this would lower the corresponding level of votable shares for the investor RTW borrowed stock from – who would not have been aware of RTW’s intentions. Most concerningly, it appears based on recent vote reports that RTW and Masimo are pursuing this empty voting strategy again in advance of theSeptember 19 meeting in connection with the new record date. We anticipate that Masimo will continue to mislead shareholders by denying knowledge of the empty voting scheme and misrepresenting communications by Politan’s advisors discussing how quickly we moved to alert the Board after becoming aware of the scheme. Any denial byMr. Kiani and his advisors ignores the clear documentary evidence. Politan is taking the appropriate next steps with theDelaware Chancery Court and with regulators.
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The Board’s claim that Mr. Kiani’s desired separation is good for shareholders has now been thoroughly refuted by a blue-chip, independent financial advisor: The highly respected investment bank
Centerview Partners was hired to advise the Special Committee tasked with evaluating a separation of Masimo’s consumer business. In a declaration submitted in support of Politan’s brief, Centerview states that it advised the directors on the committee that the separation of IP proposed byMr. Kiani would create a “negative valuation overhang,” and that if a separation were to proceed on such terms, it would “decrease value for Masimo shareholders.”
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The Board’s threats of disruption are not credible: Last week, Masimo made its latest claim that if the Company loses the shareholder vote,
Mr. Kiani would leave and the result would be significant disruption to the business – most notably in the form of departing employees. In truth,Mr. Kiani does not run the day-to-day healthcare business, was already planning to transition out of the CEO role, and Politan has laid out a detailed plan that would minimize any disruption. Further, it became evident during discovery that Masimo’s sweeping claims of employee support forMr. Kiani are inaccurate, given that following aMay Town Hall with engineering staff, the head of engineering communicated that the meeting did not “resonate well with people” and that the engineering employees “have lost trust in what [Kiani] says.”
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Masimo’s shifting narratives are crumbling: This campaign is not a matter of “he said, she said.” Instead, as more information surfaces through the legal process and more third-party experts lend their voices to help assess the practices in Masimo’s boardroom, it has been made clear that the “defensive rhetoric”
Mr. Kiani and his team rely on is hollow. For example, in an affidavitDavid Larcker , one of the foremost corporate governance experts in the country, corroborates thatMr. Koffey andMs. Brennan were denied basic information necessary for sitting directors to perform their duties, including that Masimo never fulfilled these directors’ most basic requests to see an actual budget. Further, discovery has confirmed the lack of independent oversight on Masimo’s Board, with directors simply not informed of material risks such asSEC and DOJ investigations into the Company’s conduct.
It is unfortunate that Masimo’s shareholders have had to deal with Masimo’s delays and attempts to block a fair vote from occurring. It appears there is no limit to what
Currently, a hearing on the
Sincerely,
Biographies of Politan’s Nominees
Dr.
As part of Agilent’s corporate transformation toward becoming a market-leading life sciences and diagnostics company, Darlene helped oversee three different separations of Agilent, Avago and Keysight. As a result, she brings critical expertise that would inform the appropriate division of Masimo’s IP in a separation of its Consumer Business, as well as the understanding of how best to lead and retain technical talent while executing forward-looking business growth.
Darlene is an independent director on the boards of
William “Bill” Jellison is a veteran medical technology executive and finance expert with decades of relevant experience, including as the former Chief Financial Officer of Stryker Corporation. Bill would bring extensive medical technology and financial oversight expertise. He would also be a natural fit to chair the Masimo Board’s Audit Committee, which has not been chaired by a director with any audit committee or even public company board experience in nearly five years. Bill presided over billions of dollars of M&A transactions during his tenure as Chief Financial Officer and would bring significant experience to the evaluation of a separation transaction at Masimo.
While at Stryker, Bill also oversaw all areas of international finance, including accounting, planning and analysis,
Bill is an independent director on the boards of
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Your vote is important, no matter how many shares of Common Stock you own. We urge you to sign, date, and return the enclosed WHITE universal proxy card today to vote FOR the election of the Politan Nominees and in accordance with the Politan Parties’ recommendations on the other proposals on the agenda for the 2024 Annual Meeting.
If you have any questions, require assistance in voting your
WHITE
universal proxy card or voting instruction form,
or need additional copies of Politan’s proxy materials,
please contact
Stockholders call toll-free: (888) 628-8208
Banks and Brokers call: (212) 269-5550
By Email: MASI@dfking.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The information herein contains “forward-looking statements.” Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “potential,” “targets,” “forecasts,” “seeks,” “could,” “should” or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct. If one or more of the risks or uncertainties materialize, or if any of the underlying assumptions of
Certain statements and information included herein may have been sourced from third parties. Politan does not make any representations regarding the accuracy, completeness or timeliness of such third party statements or information. Except as may be expressly set forth herein, permission to cite such statements or information has neither been sought nor obtained from such third parties. Any such statements or information should not be viewed as an indication of support from such third parties for the views expressed herein.
Politan disclaims any obligation to update the information herein or to disclose the results of any revisions that may be made to any projected results or forward-looking statements herein to reflect events or circumstances after the date of such information, projected results or statements or to reflect the occurrence of anticipated or unanticipated events.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Politan and the other Participants (as defined below) have filed a definitive proxy statement and accompanying WHITE universal proxy card or voting instruction form with the
The participants in the proxy solicitation are Politan,
As of the date hereof, the Politan Parties in this solicitation collectively own an aggregate of 4,713,518 shares (the “Politan Group Shares”) of common stock, par value
IMPORTANT INFORMATION AND WHERE TO FIND IT
POLITAN STRONGLY ADVISES ALL STOCKHOLDERS OF MASIMO TO READ ITS DEFINITIVE PROXY STATEMENT, ANY AMENDMENTS OR SUPPLEMENTS TO SUCH PROXY STATEMENT AND OTHER PROXY MATERIALS FILED BY POLITAN WITH THE SEC AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT WWW.SEC.GOV. THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS ARE ALSO AVAILABLE ON THE SEC WEBSITE, FREE OF CHARGE, OR BY DIRECTING A REQUEST TO THE PARTICIPANTS’ PROXY SOLICITOR,
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Investor
emccarthy@dfking.com
Media
dzacchei@longacresquare.com / jgermani@longacresquare.com
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