Diana Shipping (NYSE:DSX) escalated its hostile pursuit of Genco Shipping & Trading (NYSE:GNK) today, publicly rebuking the Genco Board of Directors for rejecting an increased, all-cash offer of $23.50 per share.
The proposal, made in partnership with Star Bulk Carriers (NASDAQ:SBLK), values the acquisition at approximately $1.433 billion and represents a premium aligned with Genco’s own publicly disclosed Net Asset Value (NAV).
Semiramis Paliou, CEO of Diana Shipping, expressed frustration over the Genco Board’s refusal to engage, characterizing their dismissal as an attempt at self-entrenchment rather than a focus on shareholder value.
Paliou specifically addressed Genco's skepticism regarding the financing of the deal, clarifying that the $1.102 billion in acquisition debt is fully committed and independent of any secondary vessel sales to Star Bulk.
An additional $331 million in committed funds is earmarked for Diana’s internal debt refinancing and does not impact the closing of the Genco transaction.
The tension between the two dry bulk giants has now shifted toward a formal proxy contest.
Diana, which already owns 14.8% of Genco's outstanding common stock, stated it has "no choice" but to nominate a slate of independent directors to the Genco Board.
These nominees will be tasked with exploring all value-creation opportunities that the current management has allegedly ignored.
The strategic rationale for the deal involves Diana acquiring Genco's entire fleet and subsequently offloading selected vessels to Star Bulk to optimize the combined balance sheet.
While Genco has questioned the pricing of these side-sales, Diana maintains that those arrangements are irrelevant to the guaranteed $23.50 cash payout for Genco’s minority shareholders.