07:31 AM EDT, 07/03/2024 (MT Newswires) -- Southwest Airlines ( LUV ) said Wednesday that its board has approved a one-year shareholder rights plan, effective immediately, after Elliott Investment Management said it has built around 11% economic interest in the airline.

Southwest Airlines ( LUV ) said Elliott Investment Management did not fully disclose its position to the US Securities and Exchange Commission and that the asset manager may be intending to buy a greater voting power in Southwest Airlines ( LUV ) starting July 11.

The rights plan aims to deter acquisitions of control without compensating shareholders appropriately, the airline said.

Under the rights plan, one right will be issued per share of Southwest Airlines ( LUV ) common stock, initially trading with the stock and becoming exercisable if any person or group acquires 12.5% or more of the outstanding shares. If triggered, other shareholders, other than the shareholder triggering the plan, whose rights would become void, can purchase stock at a 50% discount or receive one share per right held.

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