The Greek bulk shipping company Diana Shipping has once again increased its bid for its US competitor Genco. The industry giant Star Bulk is also involved.
Diana Shipping already holds around 15% of the shares in Genco. Now the company wants to acquire the remaining shares and thus become the sole owner of the American shipping company. Diana last made an offer of $20.60 per share in November and has now increased its offer to $23.50.
The financing for the offer, totaling $1.433 billion, has been arranged by DNB Carnegie and Nordea with the support of BNP Paribas, Standard Chartered, Deutsche Bank and Danske Bank. Once the takeover is completed, Star Bulk will come into play: the shipping company has agreed to buy 16 ships from Diana Shipping after a successful completion. In this case, the bulkers would be sold for a total price of $470.5 million. These are six Capesize vessels, seven Ultramax, two Supramax and one Newcastlemax freighter. This would add around 1.8 million tons of capacity to Star Bulk’s fleet.
Diana said the financing package and the sale of the Star Bulk vessels provided a clear path to complete the acquisition and refinance Genco’s existing debt.
“Diana’s increased offer to acquire Genco – now with fully committed financing from leading banks and a binding agreement with Star Bulk – underscores our continued belief in the financial and strategic benefits of this transaction,” said Diana’s CEO Semiramis Paliou. “These developments demonstrate our ability to negotiate and close the transaction expeditiously. We therefore reiterate our call to the Genco Board to immediately enter into constructive negotiations on this highly attractive opportunity to deliver secure and high value to shareholders. We thank our financial partners for their commitment and are pleased that Star Bulk (…) is supporting our efforts to acquire Genco.”
“As a leading publicly traded dry bulk company, we firmly believe that consolidation in our industry creates value for all shareholders,” commented Star Bulk’s CEO Petros Pappas. “We are pleased to support Diana in its planned acquisition of Genco. We are confident that this transaction will enable Star Bulk to further increase its scale, profitability and shareholder dividends while maintaining its balance sheet strength and low debt.”
The Genco board said it would consider the new offer first. The company had rejected Diana’s last approach as the price significantly undervalued the shipping company.
