Update 1:15pm: Adds Masimo response to lawsuit.
A Masimo Corp. ( NASDAQ: MASI ) activist investor has filed a lawsuit in Delaware after the medical monitoring company added some new bylaws that the activist alleges is trying to thwart its efforts.
Politan Capital, which reported an 8.8% stake in Masimo ( MASI ) in August, filed a lawsuit in the Court of Chancery for the State of Delaware. The suit came in response to bylaws that that Masimo adopted on Sept. 9, a week after the company met with Politan. The MASI board als o adopted a poison pill at the time.
“We are taking this legal action because Masimo has left us no other option for preserving our rights as stockholders," Politan Managing Partner Quentin Koffey said in a statement. ”
Masimo ( MASI ) responded to the lawsuit in a statement. "We believe this lawsuit is being initiated after the Masimo Board refused to accede to Politan’s strongarm demands for Board representation, including its demand for a board seat for Politan’s founder, Quentin Koffey, who has never served on a corporate board and has no relevant experience in Masimo’s industry," Masimo ( MASI ) said in the statement.
Politan is said to want to pressure Masimo, a medical monitoring company which supplies pulse oximeters to hospitals, to take actions to improve its stock price after it plunged following an acquisition of a high-end audio equipment company Sound United in February, the WSJ reported in August.
Wolfe Research analyst Mike Polark opined on the lawsuit in a Friday note and said the situation is "now decidedly spicier than it was." Polark has an outperform rating and $165 price target on Masimo ( MASI ).
Polark added "Opinion: Politan make a series of reasonable observations regarding company governance. Question: Why not constructively engage with this shareholder?"
Masimo ( MASI ) shares plunged 37% on Feb. 16, the day after the medical company announced it was purchasing Sound United, which drew much skepticism on Wall Street.
For further details see:
Masimo investor files lawsuit to block alleged attempt to thwart activist (update)