Activist hedge fund Elliott Investment Management and Southwest Airlines Co.
Elliott, which holds more than 9.7% of Southwest's voting power, said it is eager to meet with company representatives to discuss "immense" challenges, but it also told investors it will wage a proxy fight if it must, Reuters reported.
Earlier in August, Elliott aired plans to to nominate 10 director candidates to Southwest's 15-person board, including former Virgin America CEO David Cush and Robert Milton, the former CEO of Air Canada.
"We welcome the opportunity to discuss ideas that would drive sustained Shareholder value as we work to reach a collaborative resolution," Southwest said in a statement. The company plans to hold an investor day on Sept. 26.
Elliott told investors in a letter that Southwest needs new outside leadership for a "better future," and that it may call a special shareholder meeting to vote for new board directors, if Southwest leaders cannot identify "what is best for Southwest" and its investors.
Elliott has also proposed a new board-level committee to carry out a comprehensive business review and "drive transformational change."
Elliott's stake in Southwest is just below the 10% needed to call a special shareholder meeting.
The airline has been trying to execute a turnaround plan that includes adding seats with more legroom, moving to assigned seats and naming a new board member in July.
In June, CEO Bob Jordan said Southwest has a "great plan," which management will carry out, and that he had no plans to resign from Southwest.
Price Action: Southwest gained 0.07% to $28.20 on Monday and has slipped 0.04% to $28.19 in Tuesday's premarket trading.
