Massimo seeks to prevent a duel with Politan, proposes a settlement

A health technology company Massimofacing the imminent threat of litigation and a second proxy contest, proposed an agreement of Politan Capital’s Quentin Coffey on Thursday, which will fill an empty board seat with one of the activist’s proposed directors.

Masimo’s chief independent officer Craig Reynolds said he hoped the addition of Politan nominee William Jellison to the company’s board would help “avoid the significant distraction and expense of a proxy contest.” The company is trying to spin off its consumer technology division with an unspecified joint venture partner, CEO Joe Kiani said earlier this year.

Coffey said earlier this week that Massimo withheld information about the joint venture from the board – requiring directors to sign a non-disclosure agreement to learn the name of the potential partner. He threatened legal action unless the company provided him with that information by Friday.

The settlement proposal would not have been possible without the impending resignation of current director Rolf Klasson, whose departure was attributed to “personal health reasons.”

Koffey ran a successful proxy battle at Masimo last year, winning for himself and another nominee of Masimo’s six-member board. The activist alleged that Massimo’s acquisition of consumer technology was made possible by mismanagement, a charge that major shareholders endorsed and which Coffey says has continued unabated during his tenure as a director.

Politan launched a second proxy fight to oust Chiani earlier this year, saying that “the lack of oversight was detrimental to shareholders.” The activist also noted that outside of Kiani, no board members had access to “basic facts”, not even around R&D spending or sales and merchandise costs.

Massimo declined to comment. A representative for Politan did not immediately return a request for comment.