Southwest Airlines and Elliott Investment Management are on the brink of striking a deal that could prevent a fierce proxy battle for the control of the airline’s board, as reported by Bloomberg News. This potential settlement would involve granting the activist investor board seats, though not a majority. The agreement might be officially announced in the coming days, with exact details on the number of seats Elliott would secure remaining undisclosed.
Here are some key points to consider regarding this developing situation:
- Elliott, holding a 10% stake in Southwest, aimed to replace eight directors and take over the board as it is set to reduce its size from 15 to 12 members next year.
- The activist investor had been pressing for changes, including the removal of CEO Bob Jordan, a review of the airline’s strategy for financial improvement, and an increase in share price.
- Despite the ongoing negotiations, the Bloomberg report indicates uncertainty about the settlement’s impact on CEO Jordan’s position, as discussions could still collapse.
- Southwest declined to provide a statement on the Bloomberg report, while Elliott has yet to respond to inquiries outside regular business hours.
- In response to financial struggles exacerbated by the COVID-19 pandemic, Southwest has implemented various measures like adjusting its seating arrangements to enhance the passenger experience.
As this situation unfolds, both Southwest Airlines and Elliott Investment Management remain in talks to potentially reach a resolution without engaging in a disruptive proxy battle. The outcome of this negotiation could dictate the airline’s future trajectory, influencing its governance, leadership, and strategic direction. Stay tuned for further updates on this developing story.
