Elliott now owns enough of Southwest Airlines to call special meeting
By Svea Herbst-Bayliss
NEW YORK, Sept 2 (Reuters) -Elliott Investment Management now holds 10% of Southwest Airlines' LUV.N common stock, crossing the threshold that allows the hedge fund to call a special meeting at the carrier, according to a person familiar with the matter.
The news comes days before the two sides are scheduled to meet on Sept. 9 to discuss ways to solve problems that have contributed to Southwest's stock losing roughly half its value over the last three years.
The hedge fund, one of the world's most powerful activist investors with $70 billion in assets under management, has demanded that CEO Robert Jordan and Executive Chairman Gary Kelly be ousted. It also laid out plans to nominate 10 directors to the airline's 15-person board.
The hedge fund, which had taken an 11% economic stake through derivatives, converted enough of those holdings into common shares to cross the 10% threshold. Its overall economic stake remains unchanged.
A Southwest representative was not immediately available for comment.
Jordan, Southwest's chief executive since 2022, has said he will not resign and has signaled to staff that he and other executives are ready to fight Elliott.
Elliott has signaled to other shareholders that it is ready to take next steps, including calling a special meeting, unless the company is willing to discuss changes to its leadership.
A special meeting, used to solicit shareholder votes on matters that cannot wait until the next annual gathering, are rare. And if Elliott were to call one it would represent a major escalation of its fight with the carrier since its interest in the stock became public in June.
While the airline has been trying to repair its image and share price, it has also adopted a defensive measure by putting a shareholder rights plan in place which would make it harder for an investor to accumulate more than 12.5% of the stock.
Southwest announced plans to add seats with more leg room, moved to assigned seats and named a new board member in July.
Southwest's stock price had lost 50% of its market value in the three years to June 7 when it closed at $27.75, just before Elliott's investment in the airline became known on June 10. It closed trading at $28.92 on Friday. The company's value has tumbled to $17 billion now from $41 billion in 2017, according to Elliott's research.
Elliott has said the improvement measures come too late and offer too little.
Elliott has previously pushed for top executives to be removed including NRG NRG.N CEO Mauricio Gutierrez who insisted that he would stay only to resign late last year. NRG's stock price has risen roughly 160% since Elliott's stake was revealed in May 2023.
Reporting by Svea Herbst-Bayliss; Editing by Stephen Coates
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.
