(Reuters) -Starbucks ( SBUX ) and activist investor Elliott Management are talking about a settlement, CNBC reported on Monday, citing sources.

Elliott had built a sizable position in the coffee chain and has been discussing ways of improving its stock performance, Reuters had reported in July, citing two sources familiar with the matter.

The activist investor had proposed board expansion and governance improvement as part of a settlement that would allow CEO Laxman Narasimhan to keep his position, CNBC reported in August.

This came after the company missed expectations for third-quarter global same-store sales in July, as demand weakened in the United States and China.

Starbucks ( SBUX ) had confirmed that Elliott was a shareholder during its third-quarter earnings call and that talks with the investor had been "constructive".

Starbucks ( SBUX ) declined to comment, while Elliott did not immediately respond to a request for comment.

Former CEO Howard Schultz has opposed a potential settlement between Starbucks ( SBUX ) and Elliott, according to a report by the Financial Times in July.

Schultz is the sixth-largest shareholder in Starbucks ( SBUX ) and became Starbucks' ( SBUX ) lifelong chairman emeritus after his retirement from the post of CEO in 2023.

Starbucks' ( SBUX ) shares were up about 3% on Monday. The Wall Street Journal on Friday reported that activist investor Starboard Value had a stake in the coffee chain and wanted it to take steps to improve its stock price.

Sources told Reuters on Friday that Starboard has not made any demands as it has not contacted the company.

(Reporting by Juveria Tabassum in Bengaluru; Editing by Arun Koyyur)