Southwest Airlines And Elliott Investment Management Reportedly Moving Toward A Truce, But Retail’s Skeptical

Activist investor Elliott Investment Management and low-cost carrier Southwest Airlines ($LUV) are reportedly in talks for a potential settlement that will likely put an end to their months-long battle.

According to a Bloomberg report, the activist investor has proposed certain terms under which it will get representation on the firm’s board but without control. The report, citing sources, said the talks hadn’t been finalized and could still fall through.

Recently, Elliott disclosed it has informed the airline that it is calling for the special meeting with its shareholders and has requested for the meeting to take place on Dec. 10.

Elliott submitted a proposal to elect eight director candidates to Southwest's Board that include names like former Ryanair deputy CEO Michael Cawley, former Virgin America CEO David Cush, former head of the Federal Railroad Administration Sarah Feinberg, among others. At the same time. the activist investor has also submitted a proposal for the removal of eight current Southwest directors.

Elliott's Partner John Pike and Portfolio Manager Bobby Xu had said the nominees put forward are uniquely qualified to hold the company's executive leadership accountable and ensure that the firm delivers improved results.

"Southwest's shareholders cannot afford to see – yet again – today's new initiatives turn into tomorrow's broken promises," they had said.

Meanwhile, Southwest Airlines’ shares were down over 1% during the pre-market trading session on Monday as of 6:46 a.m. ET. However, retail sentiment on Stocktwits inched up into ‘neutral’ territory (53/100) from a ‘bearish’ zone a day ago.

One Stocktwits user with a bullish view on the firm expects the shares to register reasonable gains in the medium term.

For updates and corrections email newsroom@stocktwits.com

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