Diana Shipping Launches Tender Offer for Genco Shipping & Trading
Diana Shipping has escalated its takeover efforts for Genco Shipping & Trading by directly appealing to shareholders. The Athens-based shipping company has initiated a tender offer to acquire Genco for $23.50 per share in cash. This offer comes after months of unsuccessful negotiations with Genco’s board. Diana Shipping currently owns approximately 14.8% of Genco and claims that its bid represents a 31% premium over Genco’s undisturbed share price. The offer is fully financed, which Diana asserts eliminates any execution risk associated with the deal.
The tender offer is set to remain open until early June, unless an extension is granted. Should the offer succeed, Diana plans to pursue a second-step merger to acquire any remaining shares at the same price. This latest move intensifies a takeover battle that began late last year, during which Genco has consistently rejected Diana’s previous proposals.
Background of the Takeover Attempt
Diana Shipping’s CEO, Semiramis Paliou, expressed frustration over the lack of engagement from Genco’s board. She stated that the company had spent five months trying to discuss a fully financed, all-cash proposal but received no meaningful response. Paliou emphasized that taking the offer directly to shareholders was now the only viable option to advance the transaction. “The Genco board has refused every attempt — not a single meeting, not a single phone call — and has not responded to the merger agreement we delivered,” she noted.
Initially, Diana’s offer was set at $20.60 per share in November, which was later increased to $23.50 in March. The company argues that this latest bid reflects the full net asset value of Genco, especially as vessel prices are currently at cyclical highs. Genco’s shares are trading around $24.50, and Diana believes that its cash offer provides shareholders with an immediate exit at levels that the stock has historically struggled to achieve.
To finance the acquisition, Diana has secured $1.43 billion from a consortium of banks, including DNB, Nordea, BNP Paribas, Standard Chartered, Deutsche Bank, and Danske Bank. Additionally, Diana has arranged a deal with Star Bulk Carriers to sell 16 of Genco’s vessels for $470.5 million in cash upon completion of the acquisition. This move is intended to help reshape the combined fleet and manage leverage effectively after the takeover.
Conditions and Governance Changes
Diana’s tender offer is contingent on several conditions, including the signing of a merger agreement, shareholder acceptance of a majority of shares, and the removal or neutralization of Genco’s shareholder rights plan, which Diana has criticized as a barrier to investor participation. Alongside the tender offer, Diana has nominated six independent directors to Genco’s board, indicating its readiness to pursue governance changes if the current impasse continues.
The ongoing conflict between the two companies has become increasingly public, with Diana previously reporting on its initial takeover attempts and Genco’s rejections. The dispute has also included disagreements over the timing of Genco’s annual meeting, with Diana accusing the board of delaying the process to limit shareholder influence. As the situation develops, the outcome of this takeover battle remains uncertain, but it highlights the complexities of corporate governance and shareholder engagement in the shipping industry.
