Southwest Air Adopts Poison Pill to Counter Activist Elliott (2)

Southwest Airlines Co. has adopted a shareholder rights plan to defend against a push for a leadership overhaul by activist firm Elliott Investment Management.

Commonly known as a “poison pill,” the plan aims to dissuade what Southwest called “de facto or negative control” of the airline without compensating other shareholders, the airline said in a statement Wednesday. It comes after Elliott in June disclosed a $1.9 billion stake in the airline and demanded new leadership and a revamp of Southwest’s business to better compete with other carriers.

“The board determined that adopting the rights plan is prudent to fulfill ...