Southwest Airlines Implements Poison Pill to Block Elliott Management
Southwest Airlines has adopted a shareholder rights plan, commonly referred to as a "poison pill," in response to activist investor Elliott Investment Management's push for changes at the airline, including the potential ousting of CEO Bob Jordan and chairman Gary Kelly. The plan involves issuing one right for each share of common stock, which will become exercisable if any person or group acquires 12.5% or more of the company's shares.
If the 12.5% threshold is crossed, all other shareholders will have the right to purchase one new Southwest share for every share they currently own at a 50% discount, effectively diluting the influence and voting power of the acquiring party. This move aims to prevent hostile takeover bids and has been part of a broader strategy as Elliott had made filings with antitrust authorities to allow for an even larger stake. Elliott Investment Management was not immediately available for comment.
