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According to Bloomberg News, Elliott Investment Management and Southwest Airlines have initiated discussions regarding a potential settlement to avoid a proxy fight for control of the airline’s board. Sources familiar with the matter revealed that Elliott has proposed a framework that would grant it representation on Southwest’s board without full control. The talks are said to be progressing towards a resolution, although they have not been finalized and could still fall through.
Southwest Airlines and Elliott have not yet responded to requests for comment from Reuters. Elliott recently called for a special meeting to be held on December 10, submitting proposals to replace eight directors and gain control of the board. The company stated that it had attempted to reach a resolution to prevent a fight, noting that the timing of the proposed special meeting was strategically aimed to cause disruption before a busy travel period.
As an activist investor with a 10% stake in Southwest’s common stock, Elliott has been advocating for changes within the company for several months. These changes include the replacement of certain board members, the removal of CEO Bob Jordan, and a review of the company’s strategy to enhance financial performance and increase the share price.
Last month, Southwest Airlines introduced several initiatives to bolster declining profits, such as new partnerships, vacation packages for customers, and aircraft sale-leasebacks. Elliott, known for its activism in various companies including Starbucks, Salesforce, and Twitter, has a reputation as one of the largest and most active activist investors in the market.
(This story has been refiled to correct the spelling of Elliott in the first bullet point)
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