Elliott Investment Management is currently in discussions with Southwest Airlines Co. (LUV) about a possible resolution to avoid a proxy battle for control over the airline's board, according to Bloomberg, citing individuals knowledgeable about the situation.
Elliott has suggested a compromise that would grant them board representation without taking full control of Southwest. However, these negotiations remain tentative and might not proceed to a final agreement, per the report.
Earlier this week, Southwest Airlines acknowledged that Elliott Investment Management L.P., a shareholder, has called for a Special Meeting of Shareholders to deliberate on its proposals, primarily regarding changes to the board of directors.
In response, Southwest's Board has stated that it will thoroughly evaluate the request for a Special Meeting and engage in a constructive dialogue with Elliott, while expressing concern about the investor’s actual objectives.
In early September, Elliott surpassed the regulatory threshold required to request a special meeting by acquiring a 10 percent stake in Southwest.
As of Monday, Elliott announced its intention to convene a Special Meeting on December 10, 2024. The firm is also preparing to file a preliminary proxy statement with the U.S. Securities and Exchange Commission.
Since launching its campaign against Southwest in June, Elliott has sought to oust eight members of the airline’s Board of Directors without cause and replace them with eight candidates of its own choosing. The investor had also previously urged for the immediate replacement of Southwest's CEO, Bob Jordan.
