Southwest shareholder Artisan signals support for Elliott activist campaign

A prime Southwest Airways shareholder on Wednesday signaled its assist for Elliott Administration’s activist marketing campaign to oust CEO Bob Jordan and Govt Chairman Gary Kelly, because the provider struggles with underperformance in contrast with a few of its rivals.

Artisan Companions‘ Daniel O’Keefe and Michael McKinnon stated in a public letter to Southwest’s board that the agency famous Elliott’s Monday marketing campaign launch “with nice curiosity.” The 2 stated Artisan had in latest months instructed Kelly privately “most of the similar factors” that Elliott made publicly.

“We’re writing immediately to induce the Board to reconstitute itself and improve the Firm’s management,” O’Keefe and McKinnon wrote.

Southwest stated in an announcement the corporate welcomed suggestions from all shareholders. “The Board is assured within the capacity of our CEO and Management Workforce to evolve the enterprise and drive long-term worth for all stakeholders,” the assertion learn.

Artisan, a $158.6 billion asset supervisor, owns a 1.8% stake in Southwest, making it the Tenth-largest shareholder of report. It has held a stake within the airline on and off since 2001, in keeping with FactSet information, amassing its present holdings starting in 2020.

O’Keefe and McKinnon oversee Artisan’s International Worth Workforce, which manages $28 billion in belongings.

Elliott has an financial curiosity in Southwest price $1.9 billion and is searching for a complete enterprise assessment along with the ouster of Jordan and Kelly.

Earlier Wednesday, Jordan stated he had no plans to resign within the face of Elliott’s marketing campaign, including that Elliott was welcome to current its concepts however wouldn’t be “directing the corporate,” Reuters reported.

The transfer is probably going so as to add stress to the corporate, nevertheless. Elliott stated in its presentation that it had surveyed shareholders, in addition to staff and prospects, earlier than revealing its stake.

Different prime Southwest shareholders embody Putnam Funding Administration and T. Rowe Value, in addition to BlackRock and Vanguard. Collectively, not together with Elliott’s financial curiosity, institutional shareholders management round 60% of Southwest’s shares excellent.

— CNBC’s Leslie Josephs contributed to this report.