Southwest airlines leveraged buyout issue

[fubar]

why would Southwest get rid of their poison pill clause in their contract if this makes them more in line for a leveraged buyout?

Does anyone know what Southwest is doing to not be a target of a leveraged buyout?

 

[General Lee]

why would Southwest get rid of their poison pill clause in their contract if this makes them more in line for a leveraged buyout?

Does anyone know what Southwest is doing to not be a target of a leveraged buyout?

They want Doug Parker to take them over. Just think, he and Herb drinking Wild Turkey together, then fighting over who gets to drive the other home.....


Bye Bye--General Lee

 

[737 Pylt]

They want Doug Parker to take them over. Just think, he and Herb drinking Wild Turkey together, then fighting over who gets to drive the other home.....


Bye Bye--General Lee

:laugh: :laugh: :laugh:

I think doogie's more into daquari's and fu fu drinks! After all, he did spend time in a WOMEN'S prison!

737

 

[GuppyWN]

We ARE a target...... and it scares the hell out of me.

Gup

 

[BigShotXJTdrvr]

There was some very strong call option buying going on in SWA a few weeks ago. Very unusual in the face of recent downgrades of all airline stocks. Maybe someone who matters already knows something?

 

[328dude]

Nothing we can do. Just hope I guess.

 

[ivauir]

why would Southwest get rid of their poison pill clause in their contract if this makes them more in line for a leveraged buyout?
Activist shareholders did this.
Does anyone know what Southwest is doing to not be a target of a leveraged buyout?

No clue - I have a guess for what the plan is, but I'm not a finance major so take the following with several grains of Mortons finest. The only ways to make us less actractive are:
A) poison pill
B) higher stock price
C) more debt

Obviously, plan A has been thwarted. If we could get the stock price to go up we would. But how to acquire debt in a way the increases sharholder value? ..... Maybe General Lee can look forward to those LBB overnights afterall.
The head shed has stated that they are aware of it, so I have to trust them to be on it. I am concerned, but the worst thing that could happen is that we end up as screwed up as the rest of the airlines. The chances that one of our competors will ever have anything worth a LBO are slim to none. And General Lee, in your case Slim is out iof town Just joking.

 

[Old School]

Gary Kelly was interviewed on CNBC two weeks ago and stated that he did not think SWA was a good LBO candidate because the culture would have to be preserved for it to be successful. In an LBO, the corporate culture of SWA would probably be diminshed. I also read that the poison pill provision was eliminated to improve flexibility of the board for various provisions, not just a possible LBO maneuver.

 

[igneousy2]

why would Southwest get rid of their poison pill clause in their contract if this makes them more in line for a leveraged buyout?

Does anyone know what Southwest is doing to not be a target of a leveraged buyout?

It depends on your perspective.

If you are an employee of SWA then a buyout would obviously be VERY VERY BAD.

However, if you are one of the institutional investors that own 75.5% of SWA then a buyout is a very very good thing.

Investors don't care about culture, or even if you have a great company, all they care about is ROI (return on investment). And quite frankly SWA has a great airline with a stock that has done horribly since the end of 2000. I don't know the exact sequence of events, but obviously, at some point, the majority of shareholders voted to have the poison pill provisions removed from the by-laws. Unfotunatelly, employees don't run companies and have no say in these types of issues.

A buyout is not always bad, it just depends who buys you out. If you are lucky, a group led by some insiders (maybe Herb) would use a LBO to take SWA private. Alternatively, there are groups that take companies over - and then let them run as before - i.e Berkshire Hathaway. There there are the others.

later

 

[igneousy2]

The way to prevent an LBO is to increase the companies debt.