Elliott And Southwest Airlines Discuss Potential Settlement To Avoid Proxy Fight : Report

(RTTNews) - Elliott Investment Management and Southwest Airlines Co. (LUV) have initiated discussions regarding a potential settlement to avert a proxy fight for control of the airline's board, Bloomberg reported citing people familiar with the matter.

Elliott has proposed a framework that would allow it representation on Southwest's board without gaining full control. However, the talks are not yet finalized and could still fall apart, the report indicated.

Earlier this week, Southwest Airlines confirmed that its shareholder Elliott Investment Management L.P. requested a Special Meeting of Shareholders to consider its proposals, mainly change in directors.

Responding to the demand, Southwest said its Board would carefully review the Special Meeting request, and would discuss the process with Elliott in a constructive manner, while questioning about the investor's true intentions.

Elliott in early September had crossed the regulatory threshold to seek a special meeting after reaching 10 percent stake in Southwest.

Earlier on Monday, Elliott, which now manages funds that together hold around 11% economic interest in Southwest, had announced its request to call for a Special Meeting for December 10, 2024. The investor also said it would be filing an accompanying preliminary proxy statement with the U.S. Securities and Exchange Commission.

The investor, which launched its campaign against Southwest in June, demands to remove without cause eight members of Southwest's Board of Directors, and to elect eight Director candidates chosen by Elliott. The investor previously had demanded an immediate change of Southwest's Chief Executive Officer Bob Jordan.