Southwest Airlines said Wednesday that it has adopted a shareholder rights plan, more commonly known as a "poison pill," in response to activist Elliott Management's investment in the airline and push to oust CEO Bob Jordan and Chairman Gary Kelly.
The poison pill will only activate if Elliott — or another investor — acquires at least 12.5% of the company.
"Southwest Airlines has made a good faith effort to engage constructively with Elliott Investment Management since its initial investment and remains open to any ideas for lasting value creation," Kelly said in a statement.
Elliott and Southwest management met in person just two weeks ago, according to people familiar with the matter.
Companies often adopt shareholder rights plans in response to an activist threat; rental car company Hertz adopted a poison pill in 2013 in response to "unusual" trading activity that management thought presaged an activist.
Persons:
Elliott, Bob Jordan, Gary Kelly, Elliott —, —, Kelly, Hertz, Jordan, Morgan Stanley, Ellis
Organizations:
Southwest Airlines, Elliott Investment Management, Companies, Boeing, Southwest, Texas, Bank of America, &
Locations:
Southwest, Dallas, New York, West Palm Beach , Florida, Kirkland