Last week, Elliott and Starbucks held talks about a possible settlement.

• Sources close to the matter reveal that Elliott Management and Starbucks' board of directors are engaged in negotiations to reach a settlement.
• Last week, Elliott and Starbucks' directors met to discuss the activist's settlement proposal.

Sources close to the matter reveal that Elliott Management and the board of directors are engaged in negotiations to reach a settlement.

Last week, Elliott and Starbucks' directors met to discuss the activist's settlement offer. However, a decision has not yet been reached, and it is unclear what concerns the board had about the deal.

If settlement talks are successful, Jesse Cohn, managing partner at Elliott, could become a Starbucks director. Cohn has been a key player in Elliott's activism practice for many years, including pushing for changes at AT&T and Salesforce.

According to CNBC, the settlement details previously reported included allowing CEO Laxman Narasimhan to retain his job and remain on the board. The proposed deal also included governance improvements and board expansion. However, an agreement is currently complicated due to the opposition of Starbucks chairman emeritus Howard Schultz, who has privately expressed his opposition to a settlement with Elliott.

Starboard Value has acquired a stake in Starbucks, according to a report in the Wall Street Journal on Friday. However, it is unclear if the activist investor intends to launch a campaign against the coffee chain. Neither Elliott nor Starbucks have commented on the matter. Starboard did not respond to a request for comment.

Elliott has accumulated a Starbucks stake worth up to $2 billion, as previously reported by CNBC. The $69.7 billion hedge fund is renowned for its activism in the technology sector, launching campaigns against companies such as , , , and . However, it has also initiated a campaign at another consumer brand, where it aims to remove both the CEO and chairman of the struggling airline.

This year, Starbucks' stock price has dropped by 19%, as the company has experienced declining sales in several quarters, particularly in China and the core U.S. business.