Southwest Airlines has introduced a “poison pill” shareholder rights plan to prevent activist investor Elliott Investment Management from acquiring additional shares and potentially ousting CEO Bob Jordan and chairman Gary Kelly. This plan would be activated if any group acquires a 12.5% stake in the company, allowing all other shareholders to buy additional shares at a 50% discount.
Elliott Investment Management, which holds an 11% stake in Southwest, has called for a leadership change following the airline’s lowered second-quarter revenue guidance. The investment firm has also filed with U.S. antitrust authorities to facilitate acquiring more shares, indicating its intent to increase its influence over Southwest’s direction.
Southwest Airlines has expressed a willingness to engage with Elliott constructively, Kelly said, but emphasized its commitment to maintaining strong financial performance and securing a profitable future. As of Wednesday morning, Southwest shares remained steady at $28.37, showing a year-to-date decline of less than 2%.
