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
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.