Southwest Airlines Board To Adopt Limited-duration Shareholder Rights Plan

(RTTNews) - Southwest Airlines Co.'s (LUV) board announced on Tuesday the approval of a limited-duration Shareholder rights plan, effective immediately.

The decision was made in response to hedge fund Elliott Management's disclosure of an 11 percent stake in Southwest, failure to report its full position in Southwest Airlines to the SEC, and regulatory filings with U.S. antitrust authorities indicating plans to acquire a larger percentage of Southwest Airlines' voting power.

The rights plan, also referred to as a poison pill, aims to safeguard companies from hostile takeovers by requiring bidders to negotiate with the board rather than directly with shareholders.