Coal miner Peabody Energy Corp. (NYSE: BTU) announced quarterly and full-year results Wednesday morning at about the same time that the company also announced that it had reached an agreement with activist investor Paul Singer’s Elliott Management hedge fund. It’s not hard to figure out which announcement lit a fire under investors.

For the quarter, Peabody reported revenues totaling $1.12 billion, down from $1.4 billion a year ago, and a net loss per share of $2.98, compared with a profit of $2.20 in the year-ago quarter. Net loss from continuing operations totaled $3.12 per share. Lower shipments and falling prices get the blame.

All that was predictable. The less predictable announcement was the agreement to appoint immediately two new directors selected by Elliott who will serve until the May annual meeting, expanding the board’s membership from 10 to 12. A third new Elliott-named board member will fill a vacant slot on the existing board. A fourth new director will be selected by the company and Elliott as soon as possible and also added to the board immediately, bringing the total number of directors to 13. At the annual meeting, Peabody will nominate all four, along with all the company’s current directors, to serve a one-year term.

That means no proxy fight with Elliott, which has agreed to a standstill and other customary provisions. The hedge fund owned nearly 30% of Peabody’s outstanding stock as of mid-January.

Could this be Elliott setting the company up for a bankruptcy? When Peabody filed for bankruptcy protection in 2016, Elliott was among a group of debt holders that held about half of Peabody’s unsecured debt. In early 2017, the debt holders leveraged that debt into a large chunk of deeply discounted preferred and common stock. According to a March 2017 report from Reuters, “Elliott and Aurelius [Capital Management] gained negotiating clout by threatening a protracted legal challenge aimed at using an accounting change to strip $1 billion in collateral from a loan arranged by Citibank.”

Freshly printed preferred Peabody shares worth $750 million were available to institutional shareholders, including the debt holders, but not to individual investors. The shares were sold at a 35% discount to their estimated value. A separate $750 million in common stock was available to individual investors, as well as the major funds, and sold at a discount of 45%. Sales of either preferred or common shares were based on the amount of Peabody debt held by the individual or institutional investor.

Peabody’s net debt as of December 31 was $578.6 million, reflecting $1.3 billion in long-term debt and $732.2 million in cash and cash equivalents. Elliot’s stake in Peabody is valued at just over $600 million.

Are we about to experience deja vu all over again, this time with four of 13 board members looking out for Elliott’s interests? Stay tuned.

Meanwhile, Peabody stock traded up around 27% in the noon hour Wednesday, at $9.42 in a 52-week range of $6.45 to $37.37. The price target on the stock is $12.33, and the dividend yield is a hefty 8.54%. That’s another reason to own a lot of the stock and have board seats.

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