Global shipping company Diana Shipping said on Friday that it plans to launch a proxy fight to replace rival Genco Shipping and Trading's six current directors. The decision comes just days after Genco's board rejected Diana's takeover offer.
Diana Shipping, which owns nearly 15 per cent of Genco and proposed buying all outstanding shares for $20.60 per share in cash, will nominate executives with shipping and maritime industry experience in the coming days, the company said, confirming earlier reporting by Reuters.
Genco said the board's nominating and corporate governance committee, "will review the proposed nominees in accordance with the company’s standard process and guidelines," adding that it will act in the best interest of shareholders.
Diana said it wants to give Genco shareholders an opportunity to elect newcomers to the board who would be open to exploring alternatives, including reviewing Diana's proposal to buy Genco.
Earlier this week, Genco rejected Diana's indicative proposal, which was made on November 24 and represented a 15 per cent premium to Genco's closing share price on November 21.
Diana expressed disappointment that Genco's board took six weeks to respond to its offer and still believes shareholders would benefit if the two companies combined their platforms, pushing for consolidation in the dry bulk carriers sector. Genco said it had "thoroughly" reviewed Diana's proposal with external advisory help and determined it significantly undervalued Genco.
During due diligence, however, Genco realised that both companies' shareholders would benefit if Genco bought Diana instead and reached out to make this suggestion. Genco's stock slipped 1.16 per cent on Friday, having climbed 38 per cent in the last 12 months.
(Reporting by Svea Herbst-Bayliss; Editing by Diane Craft)
