(Reuters) -Elliott Investment Management and Southwest Airlines are close to reaching a settlement that would avert a proxy battle for control of the airline’s board, Bloomberg News reported on Wednesday, citing people familiar with the matter.
The parties are negotiating a deal that would grant the activist investor several board seats but fewer than a majority, the report said, adding that a settlement could be announced as soon as Thursday.
Bloomberg did not say how many board seats Elliott could get. The activist investor, with a 10% stake in Southwest, is gunning to replace eight directors and take control of the company’s board, which is expected to shrink to 12 from 15 members next year.
Elliott had taken its fight with Southwest to investors by calling for a special shareholder meeting after pushing for months to replace some board members, oust CEO Bob Jordan and get the airline to review its strategy to improve financial performance and boost the share price.
The Bloomberg report said it wasn’t clear what a potential settlement would mean for CEO Jordan and that the settlement was not final and that there was a possibility that talks could collapse.
Southwest declined to comment on the Bloomberg report, while Elliott did not immediately respond to a request for comment outside regular business hours.
Southwest, which has been struggling to remain profitable since the COVID-19 pandemic, has taken steps to turn its fortunes around, including by adding seats with more legroom and dropping its marquee open seating system.
(Reporting by Bipasha Dey in Bengaluru; Editing by Janane Venkatraman and Savio D’Souza)
