50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Elliott, Southwest Airlines to begin settlement discussions, Bloomberg News reports

Published 10/19/2024, 07:13 PM
Updated 10/20/2024, 12:25 AM
© Reuters. FILE PHOTO: A Southwest Airlines jet comes in for a landing after flights earlier were grounded during an FAA system outage at Laguardia Airport in New York City, New York, U.S., January 11, 2023. REUTERS/Mike Segar/File photo
LUV
-

(Reuters) - Elliott Investment Management and Southwest Airlines (NYSE:LUV) have begun discussing a potential settlement that would avoid a proxy fight for control of the airline's board, Bloomberg News reported on Saturday, citing people familiar with the matter.

Elliott has proposed a framework that would give it representation on Southwest's board but not control, the people said, adding that the talks, which were progressing toward a resolution as of Saturday, have not been finalized and could fall through.

Southwest declined to comment, while Elliott did not immediately respond to a Reuters request for comment.

On Monday, the hedge fund officially called for the special meeting to be held on Dec. 10 and submitted proposals to replace eight directors and take control of the board.

The company said it tried to reach a resolution to avoid a fight and noted that the timing of the proposed special meeting was designed to "maximize disruption" before one of the busiest travel periods of the year.

Elliott, which owns 10% of Southwest's common stock, has pushed for months to replace some members of the board, oust CEO Bob Jordan, and review its strategy to improve financial performance and boost the share price.

© Reuters. FILE PHOTO: A Southwest Airlines jet comes in for a landing after flights earlier were grounded during an FAA system outage at Laguardia Airport in New York City, New York, U.S., January 11, 2023. REUTERS/Mike Segar/File photo

The airline unveiled several initiatives last month to shore up sagging profits, including partnerships, vacation packages for customers and aircraft sale-leasebacks.

As one of the biggest and busiest activist investors, Elliott has previously pushed for changes at coffee chain Starbucks (NASDAQ:SBUX), Salesforce (NYSE:CRM) and Twitter.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.