4 hours Ago By David Richards
Masimo’s Joe Kiani an avid audiophile, is set to set to walk from the Company he founded, with the former CEO, who acquired Sound United set to sell his shares in the health Company with the future of the Masimo Consumer business now heading for an immediate sale following a spilling of the board. Veteran activist investor Quentin Koffey’s hedge fund Politan Capital Management, in one of the most contentious boardroom battles of the year in the USA has snatched control of the $8.8 Billion dollar Company that Kiani a close friend of Joe Biden built up from scratch.
Toronto , Canada – 20 June 2024; Joe Kiani, Founder, Chairman & CEO, Masimo; on Startup University Stage on day three of Collision 2024 at the Enercare Centre in Toronto, Canada. (Photo By Ramsey Cardy/Sportsfile for Collision via Getty Images) The catalyst for his demise was the $1.4 billion dollar acquisition of Sound United with questions now being raised as to whether the Consumer business is an operation that can actually be sold in todays market.
Early this morning Friday in Australia, Investors took the highly unusual step of ousting the company’s CEO – Joe Kiani who founded Masimo in 1989 – from the board while also handing an additional two seats to Politan which already won two seats in 2023 when investors became upset over the acquisition of Sound United which resulted in the share value of Masimo slumping. Bill Jellison and Darlene Solomon were elected to the board of the medical device’s maker known for producing oximeters, with the Company still trying to cut a deal with Apple for their oximeters technology which they licensed to Google earlier this week. After the Company acquired Sound United the value of the business has fallen 60%.
Kiani said in the past that he would quit as CEO and sell his shares valued at roughly A$750 million if investors replaced him on the board with a Politan nominee. Politan has previously proposed that Kiani could keep his job as CEO and return to the board even if shareholders vote him out. The biggest proxy advisory firms Institutional Shareholder Services and Glass Lewis recommended electing Politan’s nominees, with ISS writing that Kiani “wants to have his cake and eat it too” by enjoying the benefits of being a public company but running it like a private business.
Kiani who has friends in high places has been tipping millions into the reelection of the Democrats and Camilla Harris as the President of the USA. After his speech to last month’s Democratic National Convention, President Joe Biden flew off for a holiday near Santa Barbara, California. His host was Joe Kiani, who has been a long-time investor in the Democratic Party in the USA.
ChannelNews understands that the sale of the Companies audio and oximeter business that is struggling to grow sales will be a high priority for the new board. According to the Financial Times legions of law firms, investment banks, proxy solicitors and crisis PR agencies have been involved in the fight between Kiani and Politan. This resulted in one of the biggest boardroom battles in the USA this year.
It was also one of the costliest in history, with estimates of the two sides’ spending easily reaching into the tens of millions of dollars. Among its nine advisers, Masimo identified in a court filing is Greg Schultz, a former top Biden aide. According to Kiani, his plight has echoes of that of the co-founder of Apple, the company he once fought.
“When Steve Jobs was thrown out, his company fell apart,” he said. Kiani arrived in California in the 1970s from Iran as a child. After earning two electrical engineering degrees from San Diego State University, he founded Masimo with a $40,000 bank loan in his Orange County garage 35 years ago.
Marantz Model 10. The company went public in 2007 at $17 a share, eventually touching $300 per share and a $17bn market capitalisation. Amid the legal manoeuvring, that ended up with Kiani losing his battle a surprise peacemaker emerged in recent months.
Bob Chapek, the former Disney chief executive, joined the Masimo board earlier this year as an independent director (he had briefly met Kiani at a 2019 social event). Chapek attempted to craft a compromise with Koffey where Politan got one board seat but Kiani remained. That overture only earned a threat from Koffey, according to a Chapek court filing.
“During one of those calls, he warned that he would make me a media target because of my prior roles at the Walt Disney Company, and told me to think carefully about how strongly I should defend [Masimo],” Chapek wrote. A spokesperson for Politan said: “Mr Koffey categorically denies this version of events, and the record shows that at no point in the campaign was Mr Chapek personally targeted.”.
