Southwest Airlines and Elliott Investment Management Engage in Settlement Talks
In a bid to avoid a heated proxy fight, Southwest Airlines and Elliott Investment Management have initiated discussions for a potential settlement. According to sources familiar with the matter, Elliott has proposed a framework that would grant it representation on Southwest’s board without yielding control.
Averting a Proxy Fight
The talks, which were reportedly progressing toward a resolution as of Saturday, have not been finalized and may still collapse. Southwest Airlines declined to comment, while Elliott did not immediately respond to requests for comment.
Elliott’s Demands
As a major stakeholder, owning 10% of Southwest’s common stock, Elliott has been pushing for significant changes. The hedge fund has called for the replacement of eight directors, CEO Bob Jordan’s ousting, and a review of the airline’s strategy to boost financial performance and share price.
Recent Initiatives
In an effort to address sagging profits, Southwest unveiled several initiatives last month. These include partnerships, vacation packages for customers, and aircraft sale-leasebacks. While these moves aim to shore up the airline’s financials, Elliott remains committed to driving change.
A History of Activism
As one of the largest and most active investors, Elliott has a track record of pushing for reforms. The hedge fund has previously targeted companies like Starbucks, Salesforce, and Twitter, advocating for strategic overhauls and leadership changes.
Special Meeting Looms
On Monday, Elliott officially requested a special meeting to be held on December 10, submitting proposals to replace eight directors and assume control of the board. Southwest has expressed concerns that the timing of this meeting is designed to “maximize disruption” ahead of one of the busiest travel periods of the year.
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