Diana Shipping has expressed disappointment following the rejection of its enhanced, all-cash offer to acquire all outstanding shares of Genco Shipping and Trading.
The proposal, made in partnership with Star Bulk Carriers, valued the shares at $23.50 each and represented a “premium valuation”, according to the Greek shipping firm.
Semiramis Paliou, Chief Executive Officer of Diana Shipping, stated that the offer provided an attractive opportunity for shareholders to realise a valuation in line with Genco’s implied net asset value. Paliou noted that the Genco board dismissed the proposal for a second time without seeking clarification or engaging in constructive dialogue.
Diana Shipping reported that the total $1.433 billion financing for the transaction is fully committed and does not depend on the sale of vessels to Star Bulk. The firm clarified that $1.102 billion of this debt financing is dedicated to the acquisition, providing sufficient proceeds to complete the $23.50 per share transaction.
The remaining $331 million of the committed funds is intended for a voluntary refinancing of Diana Shipping's existing debt, the company noted.
Genco has previously raised questions regarding the certainty of this financing, which Diana Shipping described as unfounded and disproved by public disclosures.
Paliou claimed that Genco’s focus on the price of selected vessels intended for sale to Star Bulk is irrelevant to the completion of the proposed deal. She suggested that the board and management team at Genco appear more focused on, “entrenching themselves than maximising value for their shareholders.”
Following the rejection, Diana Shipping confirmed it will proceed with efforts to elect a slate of independent director nominees to the Genco board. The company intends for these nominees to explore all opportunities for value creation, including the current acquisition proposal.
Diana Shipping currently owns approximately 14.8 per cent of the outstanding shares of common stock in Genco. The company urged other shareholders to encourage Genco’s management to act favourably towards its enhanced offer submitted on March 6.