Peabody Energy Corp. is solidifying a relationship with its top shareholder, Elliot Management Corp., with new board members and a cooperation agreement between the two entities.
Elliot, one of the largest activist investment firms in the world, agreed to certain customary standstill, voting and other provisions while two representatives of Elliot were added to Peabody's board of directors. The two companies also agreed to add a coal executive to Peabody's board of directors as well as a fourth independent director with mining operations experience to be jointly identified by Elliot and Peabody.
"We welcome this closer relationship with Elliott, which has been a substantial investor in Peabody's capital structure for more than four years," Peabody President and CEO Glenn Kellow said. "We are aligned in our objectives of maximizing value creation and shareholder returns."
Elliot Management owned 28.9 million shares, or roughly 29.9% of Peabody's outstanding shares as of Jan. 1, according to S&P Global Market Intelligence. The announced appointments to the board include Elliott Management Equity Partner Dave Miller, Elliott Management Portfolio Manager Samantha Algaze and coal industry executive Darren Yeates. Peabody said it will nominate each of the new directors, along with all current directors, for a full one-year term in May at the company's upcoming annual meeting of shareholders.
Miller, who is a senior portfolio manager and head of U.S. restructuring at Elliot, said they are convinced of Peabody's "significant unrealized potential" and looks forward to helping the company unlock long-term value for its investors. Details of the agreement between the two companies are expected to be filed with the U.S. SEC later today.