Southwest Airlines said on Wednesday it had adopted a poison pill after activist investor Elliott Investment Management pushed for changes at the carrier.
The company is issuing one right for each share of common stock. The rights will initially trade with the carrier's common stock and will generally become exercisable if any person or group acquires 12.5% or more of the company's shares.
Shareholder rights plans, known as a "poison pill", are used by corporate boards to thwart hostile takeover bids.
"Southwest Airlines (NYSE:LUV) has made a good faith effort to engage constructively with Elliott Investment Management since its initial investment and remains open to any ideas for lasting value creation," Southwest Executive Chair Gary Kelly said in a statement.
Elliott was not immediately available for a comment.
