Company Announcements

Glass Lewis States That Politan’s Nominees Represent a “Clear, Reasoned and Compelling Alternative to the Status Quo”

Believes Investors Should Have “Little Confidence” in Existing Board’s Ability to Advance Review of Strategic Alternatives

Stresses that Politan’s Nominees “Would Go a Long Way to Ensuring the Interests of All Investors Are Clearly and Consistently Represented”

NEW YORK--(BUSINESS WIRE)--Sep. 17, 2024-- Politan Capital Management (together with its affiliates, “Politan”), an 8.9% shareholder of Masimo Corporation (“Masimo” or the “Company”) (NASDAQ: MASI), today highlighted that leading proxy advisory firm Glass, Lewis & Co. (“Glass Lewis”) has updated its earlier report to reiterate its recommendation that shareholders vote FOR the election of Politan’s nominees, Darlene Solomon and Bill Jellison, to the Company’s Board of Directors (the “Board”) at the Annual Meeting of Stockholders (the “Annual Meeting”), set for September 19.

In its reaffirmation that urgent change is needed at the Annual Meeting, Glass Lewis writes:¹

Reiterating Its Recommendation for Politan’s Nominees

• “[W]e remain decidedly concerned with the efficacy of Masimo's status quo oversight architecture. We further maintain investors should have exceedingly limited confidence in the existing board's ability to credibly advance a thoughtful and independent review of key strategic alternatives, including a separation of Masimo's much maligned consumer millstone.”

• “As an important bookend to the foregoing perspectives, we also continue to believe Politan's nominees — both of whom we consider credible and independent — represent a sound substitute here, and would go a long way to ensuring the interests of all investors are clearly and consistently represented at a particularly critical juncture for the Company.”

Refuting Masimo’s Claims That Politan Wants Control

• “Indeed, we consider the only evident change of control contemplated here is a tilt away from a board governed by the preferences of CEO Joe Kiani and toward one populated by a majority of independent directors.”

Dismissing Mr. Kiani’s Threats of Disruption

• “[A]s it relates to the possible departure of a wider swathe of Masimo employees, we find it rather disconcerting that the board continues to rely on a speculative letter which subsequent filings — including, among others, an internal Masimo email — suggest was viewed as compulsory and coercive by an indeterminate number of Masimo staff members.”

Rejecting Masimo’s Argument That Politan Has Not Presented a Plan

• “[W]e consider the board's determination to reference the prospectively harmful implications of ‘uncertainty around ... Masimo's strategy’ to be a decidedly bold angle, given long-term Masimo investors are still reeling from the legacy board's willingness to endorse a costly non-core boondoggle from which the Company has not yet recovered … Perhaps more alarming in this context, Mr. Kiani has remained largely unrepentant regarding the arrangement…”

• “[W]e would emphasize our view that the board's position on the matter remains disingenuous in any case. In particular, we consider Politan's materials have regularly espoused an intended direction for Masimo, including: (i) an orderly exit from the Company's consumer business … (ii) reviewing Masimo's extant portfolio to identify potentially failed or mismanaged products … and drive growth; and (iii) reviewing Masimo's cost architecture to improve margins toward long-stated but never achieved targets, in all cases while supporting strong R&D spend girded by enhanced procedural architecture.”

Rebutting Masimo’s Argument That 2^nd Quarter Performance Is Validation

• “For the avoidance of doubt, we consider Masimo's recent quarterly results and updated guidance continue to leave no credible space for mixed messaging, as the consumer health business — which, more two years on from the SU deal and notwithstanding the central premise underpinning the original value-destroying transaction, is expected to have $0 in revenue impact in connection with a prospective separation — remains in an unchecked tailspin. We thus do not see that an uptick in quarterly performance by a core segment which Politan has regularly argued should be Masimo's central focus proves to be a particularly impressive bastion for the status quo here.”

Noting the California Litigation Has Further Highlighted the Governance Failings of Masimo’s Board

• “Just as notably, our original position is arguably reinforced with reference to a litany of positions taken by Masimo in the related proceeding which clearly failed to gain traction.”

• “Among other things, we note the following: (i) Masimo failed to establish the spin-off was the idea of Mr. Koffey, rather than Mr. Kiani, undermining a key defensive narrative; (ii) Masimo failed to establish Politan misrepresented the selection of advisors by the special committee; (iii) Masimo failed to establish Mr. Koffey attempted to expand his committee powers beyond the bounds of the committee's authority to purposely craft a non-viable term sheet; (iv) the Court concluded members of the committee were ‘made aware’ of the terms underpinning the early February 2024 term sheet, and that evidence shows such members, ‘even without being provided the term sheet, comprehended the proposed terms of the spin-off’; (v) Masimo failed to convincingly support the claim that Politan sought to secretly secure information damaging to Masimo, which claim Masimo continues to make, including as recently as September 15, 2024; (vi) the prior presentation of certain materials by CFO Micah Young to the board ‘[did] not appear to be a budget’, reinforcing concern that board-level information flows are atypical and inadequate.; (vii) Mr. Kiani failed to provide the name of the prospective joint venture partner to Mr. Koffey and Ms. Brennan, despite having provided it to the remaining members of the board weeks prior; and (viii) ‘from the Court's perspective, a reasonable shareholder would be more concerned with [Mr.] Kiani signing a term sheet, albeit a non-binding one, with a potential joint-venture partner without consulting Masimo's complete Board’ (emphasis added).”

Politan encourages shareholders to visit www.AdvanceMasimo.com for more information.

Your vote is important, no matter how many shares of Common Stock you own. We urge you to sign, date, and return the 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 D.F. King using the contact information provided here:

D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
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 Politan Capital Management LP (“Politan”) or any of the other participants in the proxy solicitation described herein prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Politan that the future plans, estimates or expectations contemplated will ever be achieved.

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 Securities and Exchange Commission (the “SEC”) to be used to solicit proxies for, among other matters, the election of its slate of director nominees at the 2024 annual stockholders meeting (the “2024 Annual Meeting”) of Masimo Corporation, a Delaware corporation (“Masimo”). Shortly after filing its definitive proxy statement with the SEC, Politan furnished the definitive proxy statement and accompanying WHITE universal proxy card or voting instruction form to some or all of the stockholders entitled to vote at the 2024 Annual Meeting.

The participants in the proxy solicitation are Politan, Politan Capital Management GP LLC (“Politan Management”), Politan Capital Partners GP LLC (“Politan GP”), Politan Capital NY LLC (the “Record Stockholder”), Politan Intermediate Ltd., Politan Capital Partners Master Fund LP (“Politan Master Fund”), Politan Capital Partners LP (“Politan LP”), Politan Capital Offshore Partners LP (“Politan Offshore” and, collectively with Politan Master Fund and Politan LP, the “Politan Funds”), Quentin Koffey, Matthew Hall, Aaron Kapito (all of the foregoing persons, collectively, the “Politan Parties”), William Jellison and Darlene Solomon (such individuals, collectively with the Politan Parties, the “Participants”).

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 $0.001 per share, of Masimo (the “Common Stock”). Mr. Koffey may be deemed to own an aggregate of 4,714,746 shares of Common Stock (the “Koffey Shares”), which consists of 1,228 restricted stock units (the “RSUs”) as well as the Politan Group Shares. Politan, as the investment adviser to the Politan Funds, may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Politan Group Shares, and, therefore, Politan may be deemed to be the beneficial owner of all of the Politan Group Shares. The Record Stockholder is the direct and record owner of 1,000 shares of Common Stock that comprise part of the Politan Group Shares. Both the Politan Group Shares and the Koffey Shares represent approximately 8.9% of the outstanding shares of Common Stock based on 53,182,247 shares of Common Stock outstanding as of June 13, 2024, as reported in Masimo’s definitive proxy statement filed on June 17, 2024. As the general partner of Politan, Politan Management may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) all of the Politan Group Shares and, therefore, Politan Management may be deemed to be the beneficial owner of all of the Politan Group Shares. As the general partner of the Politan Funds, Politan GP may be deemed to have the shared power to vote or to direct the vote of (and the shared power to dispose or direct the disposition of) all of the Politan Group Shares, and therefore Politan GP may be deemed to be the beneficial owner of all of the Politan Group Shares. Mr. Koffey, including by virtue of his position as the Managing Partner and Chief Investment Officer of Politan and as the Managing Member of Politan Management and Politan GP, may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) all of the Koffey Shares.

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, D.F. KING & CO., INC., 48 WALL STREET, 22ND FLOOR, NEW YORK, NEW YORK 10005 STOCKHOLDERS CAN CALL TOLL-FREE: (888) 628-8208.

_________________________
¹ Permission to quote Glass Lewis was neither sought nor obtained. Underlining added.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240917508744/en/

Investor Contact
D.F. King & Co., Inc.
Edward McCarthy / Gordon Algernon / Dan Decea
MASI@dfking.com

Media Contacts
Dan Zacchei / Joe Germani
Longacre Square Partners
dzacchei@longacresquare.com / jgermani@longacresquare.com

Source: Politan Capital Management