'Poison Pill' Activated: Southwest Airlines Counters Elliott Investment's Move With Defense Strategy
Portfolio Pulse from Nabaparna Bhattacharya
Southwest Airlines (NYSE:LUV) has activated a limited-duration shareholder rights plan in response to Elliott Investment Management's 11% stake. The plan aims to prevent any person or group from acquiring significant control without compensating shareholders. This move follows Elliott's call for leadership changes and Southwest's lowered revenue outlook for Q2 2024.
July 03, 2024 | 12:54 pm
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Southwest Airlines has implemented a shareholder rights plan to counter Elliott Investment Management's 11% stake, aiming to prevent hostile takeovers. This follows Elliott's call for leadership changes and Southwest's lowered revenue outlook for Q2 2024.
The activation of the shareholder rights plan (poison pill) is a defensive move to prevent Elliott from gaining control without compensating shareholders. This could stabilize the stock price in the short term, but the lowered revenue outlook for Q2 2024 may offset any positive impact.
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