Southwest Air adopts 'poison pill' as activist investor Elliott takes significant stake in company

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Southwest Airlines News

Elliott Investment Management,Southwest,Poison Pill

Southwest Airlines has adopted a ‘poison pill’ following activist investor Elliott Investment Management taking a significant stake in the company.

The airline said Wednesday that the shareholder rights plan is effective immediately and expires in a year. Southwest shareholders would need to give prior approval for an extension.

Southwest said that it adopted the rights plans due to several concerns, including Elliott's approximately 11% stake in the company and the flexibility that the firm has to acquire a significantly greater percentage of Southwest's voting power across two of its funds starting as early as July 11.

In midday trading, Southwest shares added 11 cents to $28.41. Shares of the company are down about 21% in the past year, while the benchmark S&P 500 index is up roughly 25% over the same time. -- Steve Ballmer passed Bill Gates on Monday to become the sixth-richest person in the world, the first time the former chief executive officer of Microsoft Corp. has been wealthier than the company’s co-founder.

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