Baxter, With Loeb, Adds Boston Scientific CEO to Boardby and
Third Point is said to encourage Mahoney's nomination
Mahoney led turnaround at one of biggest U.S. device makers
Baxter International Inc. appointed Boston Scientific Corp. Chief Executive Officer Mike Mahoney to its board, adding a director who turned around one of the nation’s biggest medical-device companies.
The move comes as Deerfield, Illinois-based Baxter is looking for a new leader of its own. CEO Robert Parkinson announced his plans to step down earlier this year after spending more than a decade at the company. Mahoney’s nomination was encouraged by Third Point LLC, Baxter’s biggest shareholder, which played a role in recruiting him, according to a person familiar with the deliberations who declined to be identified discussing non-public information.
Third Point wants Baxter to replicate Mahoney’s track record at Marlborough, Massachusetts-based Boston Scientific, where he returned the company to growth after a four-year losing streak, boosted operating margins and shifted into faster-growing product areas. He joins Third Point partner Munib Islam on the board and fulfills the company’s Sept. 30 agreement to appoint a second independent director to the group.
"It adds some credibility to the board in terms of expertise in med-tech for the CEO succession planning," said Jonathan Palmer, an analyst at Bloomberg Intelligence in New York. The companies have very little product overlap since Baxter focuses on hospital products and Boston Scientific on cardiovascular and other implantable devices, he said.
Baxter will release its third-quarter earnings before the market opens on Oct. 27. Analysts estimate the company will post earnings excluding certain items of 29 cents a share, according to the average of 12 estimates compiled by Bloomberg.
Third Point, the activist hedge fund run by Daniel Loeb, held 53.9 million shares of Baxter at the end of September, according to a Securities and Exchange Commission filing. That makes it the company’s largest shareholder, with 9.9 percent of the outstanding stock.