Southwest Airlines has adopted a "poison pill" or shareholder rights plan to fend off an effort by activist hedge fund Elliott Management to push for changes at the airline. The poison pill will be triggered if Elliott or another investor acquires 12.5% or more of Southwest's shares. This would allow other shareholders to buy more shares at a 50% discount, diluting the activist investor's stake. Southwest Airlines adopted the strategy in response to Elliott Management's regulatory filings that could enable them to increase their ownership stake.
