The board of directors of US dry bulk shipowner Genco Shipping and Trading has unanimously rejected a revised, unsolicited cash tender offer of $24.80 per share from its largest shareholder, Diana Shipping.
According to Genco, the offer continues to undervalue the company, fails to provide a control premium, and falls well below its mean analyst net asset value estimate of $26.66.
Diana Shipping hit back, claiming Genco spent an additional $2 million on financial opinions to support this rejection, adding to more than $13 million already spent opposing the acquisition bids.
In a letter, Genco Chairman and Chief Executive Officer John C. Wobensmith and Lead Independent Director Kathleen C. Haines wrote that any offer below liquidation value is not in the best interests of shareholders.
However, the board noted it remains willing to meet if Diana Shipping submits a proposal that adequately compensates for its assets and includes an appropriate premium.
Diana Shipping responded by criticising the board for refusing to negotiate, noting the company has rejected three increasingly compelling offers without any engagement.
Commenting on the rejection, Semiramis Paliou, Chief Executive Officer of Diana Shipping, stated, "The Genco board has no intention whatsoever of participating in the type of dialogue that can result in an attractive transaction for their shareholders".
Paliou accused the board of moving valuation metrics by abandoning independent broker source VesselsValue, which the company had used in investor presentations for five years. She asserted that the two recent offers from the dry bulk firm reflected nearly 100 per cent of Genco’s net asset value based on those historical broker valuations.
Furthermore, Diana Shipping noted that historical take-private transactions in the shipping industry have concluded at an average 20 per cent discount to net asset value rather than a premium. The firm has urged Genco's shareholders to elect its own six independent director nominees at the annual meeting on June 18 and tender their shares before the offer expires on June 26.
