Southwest Airlines has reportedly engaged in talks with activist investor Elliott Management to negotiate a settlement that would result in avoiding a proxy fight.
After unveiling a $2 billion stake in Southwest in June, Elliott began pushing for changes at the struggling airline and demanded a change in leadership. When its request didn’t get a satisfactory response, the activist investor called a special shareholder meeting for December 10 in what market its first proxy fight since 2017.
Now, according to a report by Bloomberg, Southwest has shown a willingness to find common ground. During recent talks, Elliott asked for a “significant” representation on the company’s board but won’t seek full control. Elliott previously nominated 10 names for Southwest’s board of directors, which will have 12 members next year, before trimming the list to eight.
It is important to note that the negotiations between the two sides are “ongoing,” and there is no guarantee that they will finish on a positive note.
Southwest is expected to report its quarterly earnings on Thursday. The company saw its revenue increase by 4.5% to $7.35 billion in the last quarter but experienced a 46.27% drop in operating income, which came at $367 million.
The Southwest stock closed at $30.98 per share on Friday, being 8.78% up year-to-date.