The hedge fund trying to seize control of Southwest Airlines just announced a new escalation in its bid to run the company.
Elliott Management told the carrier’s board of directors that it will take its plan directly to the company’s shareholders after Southwest’s adoption of a so-called “poison pill” made it clear that the board has no interest in cooperating with the hedge fund.
“Elliott indicated that it is open to collaborating with the Board on a path forward, but absent alignment Elliott intends to move expeditiously to give shareholders a direct say on the necessary leadership changes,” the fund wrote in a publicly released letter to the board.
Elliott disclosed last month that it had acquired an 11% stake in Southwest with the aims of firing CEO Bob Jordan, installing a group of friendly directors, and instituting a “comprehensive business review” that would get to the bottom of the airline’s struggling business. Jordan has already said he’s not stepping down voluntarily, and last week Southwest unveiled a “poison pill” gambit would that would severely dilute Elliott’s stake if it acquired more shares in a bid to assert more control.
Southwest shares were flat in Monday trading. They’re down about 5% for the year.