(Reuters) – Elliott Investment Management and Southwest Airlines have agreed to a settlement to avoid a proxy fight over control of the company’s board, Bloomberg News reported on Saturday, citing people familiar with the matter. It is reported that negotiations have begun.
Mr. Elliott has proposed a framework that would give him representation on Southwest Airlines’ board of directors but no management control, and talks that had been moving towards a resolution as of Saturday had not yet been finalized, according to people familiar with the matter. He added that there is a possibility that the agreement may fall apart.
Southwest declined to comment, while Elliott did not immediately respond to a Reuters request for comment.
The hedge fund on Monday formally called a special general meeting on Dec. 10 and submitted a proposal to replace eight directors and take control of the board.
The company said it tried to reach a resolution to avoid the dispute, and the timing of the proposed special meeting is designed to “maximize disruption” before the busiest travel period of the year. he pointed out.
Elliott, which owns 10% of Southwest Airlines’ common stock, will replace some members of its board of directors and fire CEO Bob Jordan in a bid to improve financial performance and boost stock price. We have been pushing ahead with a review of our strategy for several months.
Last month, the company announced several initiatives to offset weak profits, including partnerships, vacation packages for customers and aircraft sale-leasebacks.
As one of the largest and busiest activist investors, Elliott has pushed for change at coffee chains Starbucks, Salesforce and Twitter.
(Reporting by Uruvi Dugar; Editing by Daniel Wallis and Tom Hogue)
