Activist investor Elliott threatens Southwest Airlines proxy fight for leadership changes
Adds Southwest's comments in paragraph 5
By Rajesh Kumar Singh and Shivansh Tiwary
July 8 (Reuters) -Activist investor Elliott Investment Management on Monday warned of a proxy fight to push for leadership changes at U.S. budget carrier Southwest Airlines LUV.N.
In a letter to Southwest's board, Elliott said while it is open to collaboration, it plans to "move expeditiously to give shareholders a direct say on the necessary leadership changes."
The investment management firm, known for pushing changes to boost shareholder returns, has called for a reconstitution of Southwest's board with "new, truly independent" directors possessing expertise in airlines, customer experience and technology.
Ithas also called for a leadership change citing Southwest's disappointing financial results.
In a statement, Southwest said it remains open to constructive conversations with Elliott, including evaluating additional "strong and independent" director candidates. The airline, however, added the investment firm has focused on personal attacks on its leadership and board, conditioning any serious discussions on an immediate CEO change.
In its letter, Elliott said the airline's performance is "unacceptable" and a leadership change is required to return it to its once-leading position in the industry.
"Shareholders simply do not believe this board and management team are capable of devising and executing a bold new plan to turn around Southwest," it said.
Elliott currently owns an 11% stake in the company, making it one of the largest investors.
Last week, Southwest said the activist investor had made filings with antitrust authorities that would allow it to acquire an even larger voting power as early as July 11. It prompted the company to adopt a "poison pill", used by corporate boards to thwart hostile takeover bids, to deter Elliott from raising its stake.
Elliott said it is not seeking control of Southwest, but added the airline's board has put its own "self-interest ahead of the company's" by adopting the "poison pill."
It also criticized the appointment of aviation industry veteran Rakesh Gangwal to Southwest's board, calling it an attempt on the part of the board to "entrench itself and the current management team."
"These actions...demonstrate how profoundly out of touch Southwest's board has become with shareholder sentiment and with the reality of the situation," Elliott said in its letter.
Gangwal - who co-founded InterGlobe Aviation INGL.NS, the operator of India's largest airline IndiGo - has also served on the boards of US Airways Group, CarMax KMX.N and Office Depot, among others.
"Rakesh's expertise in travel technology will be valuable as we continue to make investments that support our operations and strategic initiatives," said Gary Kelly, executive chairman of Southwest's board.
Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary in Bengaluru; Editing by Shilpi Majumdar, Anil D'Silva and Josie Kao
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
