Southwest Airlines has adopted a "poison pill" or shareholder rights plan to fend off an effort by activist hedge fund Elliott Management to push for changes at the airline. The poison pill will be triggered if Elliott or another investor acquires 12.5% or more of Southwest's shares. This would allow other shareholders to buy more shares at a 50% discount, diluting the activist investor's stake. Southwest Airlines adopted the strategy in response to Elliott Management's regulatory filings that could enable them to increase their ownership stake.
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00:00It's Benzinga, and here's what's on the block.
00:02Southwest Airlines has adopted a poison pill or shareholder rights plan to fend off an effort by
00:08activist hedge fund Elliott Management to push for changes at the airline. The poison pill will
00:13be triggered if Elliott or another investor acquires 12.5% or more of Southwest's shares.
00:19This would allow other shareholders to buy more shares at a 50% discount,
00:23diluting the activist investor's stake. Southwest Airlines adopted the strategy
00:27in response to Elliott Management's regulatory filings that could enable
00:31them to increase their ownership stake. For all things money, visit Benzinga.com.