Medical devices company Masimo has erased several recent bylaw amendments that activist Politan Capital Management alleged were designed to stifle dissent. The hedge fund told Insightia that it would prefer to strike a truce with Masimo.
In a regulatory filing Monday, Masimo announced that it had reverted its bylaws back to where they were in October 2019, abandoning the amendments made last year after Politan took an activist stake. These would have forced investors seeking board seats to reveal information about their backers. The move comes after Politan in December landed a court win on the matter.
“We are glad to see Masimo repeal its widely criticized and illegal bylaw amendments. However, it is disappointing that this action only comes after the company lost its motion defending its CEO’s egregious change-of-control agreement,’’ said Politan in an emailed statement to Insightia.
Politan accused Masimo of adopting a poison pill last September and other defensive bylaw changes in response to the investor’s privately stated interest in joining the company’s board. The following month, Politan sued Masimo, alleging the bylaw amendments were part of an aggressive campaign to eliminate shareholder rights.
The activist also took issue with a change-of-control mechanism in CEO Joe Kiani’s compensation that could trigger a payment of close to $1 billion if two board members are replaced, and which may have forced the board into adopting the coercive bylaws.
‘‘While we remain fully committed to our legal challenge, our preference continues to be to work constructively with Masimo to reach a path forward in the best interests of the company and its stakeholders,” added Politan, which holds nearly 9% of Masimo’s shares.