Elliott Investment Management and Southwest Airlines have entered into discussions regarding a potential settlement to avoid a proxy battle over control of the airline’s board, according to a report by Bloomberg News on Saturday, which cited individuals familiar with the situation.
Elliott Investment Management has suggested a framework that would allow them representation on the board of Southwest Airlines without taking full control. The discussions are reportedly progressing towards a resolution, although they have not yet been finalized and could potentially collapse.
Southwest Airlines declined to comment on the matter, and Elliott did not immediately respond to a request for comment from Reuters.
On Monday, the hedge fund formally requested a special meeting to be held on December 10, proposing to replace eight directors and gain control of the board. The company stated that it attempted to reach a resolution to avoid the confrontation and noted that the timing of this special meeting was intended to “maximize disruption” ahead of a busy travel period.
Owning 10% of Southwest’s common stock, Elliott has been advocating for months to replace certain board members, remove CEO Bob Jordan, and reevaluate the company’s strategy to enhance financial performance and increase the share price.
Last month, Southwest Airlines introduced several initiatives aimed at improving declining profits, including forming partnerships, offering vacation packages for customers, and engaging in aircraft sale-leaseback agreements.
Elliott Investment Management, known for being a significant and active investor, has previously advocated for changes in other companies such as Starbucks, Salesforce, and Twitter.
