Diana Shipping Proposes New Board for Genco Following Rejected Takeover Offer
Diana Shipping (DSX) has announced plans to nominate six candidates to replace the current board of directors at rival Genco Shipping & Trading (GNK). This move follows Genco’s rejection of Diana’s all-cash takeover offer, which proposed purchasing outstanding shares at $20.60 each, representing a 15% premium. Diana, which holds approximately 15% of Genco, expressed disappointment over Genco’s decision, which took over six weeks and lacked engagement with Diana’s proposal. The company stated that its takeover offer would provide shareholders with an attractive premium value, supported by a financing letter from two leading shipping banks.
Diana’s CEO, Semiramis Paliou, emphasized the potential benefits of a merger, stating that it would create value for shareholders and push for consolidation in the dry bulk carriers sector. The company plans to file the necessary documents with the U.S. Securities and Exchange Commission (SEC) soon to formalize its proposal.
Disappointment Over Genco’s Board Response
Diana Shipping’s leadership expressed frustration over Genco’s lack of communication regarding the takeover offer. Paliou remarked, “Our all-cash offer would realize the benefits of combining our platforms and provide Genco shareholders with immediate, certain value at a meaningful premium to historical trading levels.” She further noted that as Genco’s largest shareholder, Diana has a responsibility to respond to the board’s failure to adequately consider their offer.
The six nominees proposed by Diana include industry veterans with extensive experience in shipping. Notable candidates are Gustave Brun-Lie, who has nearly 40 years in the industry; Chao Sih Hing Francois, a director at Wah Kwong; and Paul Cornell, who brings over 35 years of energy experience. Other nominees include Jens Ismar, Viktoria Poziopoulou, an experienced shipping lawyer, and Quentin Soanes, another veteran in the shipping sector.
Diana believes that a new board at Genco could explore strategic alternatives, including the possibility of its own takeover offer, thereby enhancing shareholder value.
Market Reactions and Stock Performance
In the wake of these developments, market reactions have been mixed. On Friday, shares of Diana Shipping fell by 0.48%, while Genco’s shares declined by 1.76%. Despite this, retail sentiment on Stocktwits for DSX shares remained bullish, with extremely high message volumes. Similarly, GNK shares also saw bullish sentiment among retail investors, albeit with high message volumes.
Over the past year, shares of Diana Shipping have experienced a decline of over 17%, while Genco Shipping’s shares have risen by more than 35%. This divergence in stock performance highlights the contrasting trajectories of the two companies amid ongoing discussions about potential consolidation in the shipping industry.
