Genco Shipping rejects Diana Shipping takeover bid as inadequate

Genco Shipping & Trading Limited (NYSE: GNK) rejected Diana Shipping Inc.'s acquisition proposal and urged shareholders to disregard Diana's proxy materials ahead of the annual meeting, according to a company statement released April 13.

Genco's board characterized Diana's $23.50 per share offer as inadequate, stating it falls below the mean analyst net asset value estimate of $25.00 and fails to provide an appropriate control premium. A special committee of independent directors reviewed the proposal with external advisors and determined it undervalued the company.

The drybulk shipping company reported delivering 247% total shareholder returns over the past five years, compared to the S&P 500's 76% and Diana's 53% over the same period. Since April 2021, Genco has distributed $292 million in dividends, invested $492 million in vessels, and reduced debt by $250 million.

Genco warned that Diana's proxy contest seeks control of the board rather than approval of the acquisition proposal. The company stated that if Diana's nominees gain board control, they could approve a transaction below the current proposal price or change Genco's dividend model.

Diana is pursuing both an acquisition proposal and a slate of director nominees to replace Genco's entire board. Genco operates 45 drybulk vessels with aggregate capacity of approximately 5,044,000 deadweight tons.

Jefferies LLC serves as Genco's financial advisor, while Herbert Smith Freehills Kramer and Sidley Austin provide legal counsel. Morgan Stanley acts as special advisor to the board of directors.

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