Genco rejects Diana Shipping bid, citing valuation gap and deal risks

US-listed dry bulk owner Genco Shipping & Trading has turned down a revised takeover approach from Greece’s Diana Shipping, saying the proposal undervalues the company and introduces significant execution risks, Splash 247 reports.

 

Acting on advice from an independent committee, Genco’s board rejected the $23.50-per-share all-cash offer for the shares Diana does not already own. The company said the bid fails to deliver a sufficient premium and does not reflect the strength of its fleet, earnings, and asset values.

 

The move follows Diana’s decision to raise its offer from $20.60 per share and secure financing support, including a partnership with Star Bulk Carriers. Diana, which already owns about 14.8% of Genco, positioned the revised bid as a 31% premium to the undisturbed share price. Genco, however, said that benchmark is outdated and does not account for recent improvements in performance and asset pricing.

 

A key sticking point remains the proposed sale of 16 vessels to Star Bulk as part of the deal structure. The package (covering one newcastlemax, six capesizes, seven ultramaxes, and two supramaxes) is valued at around $470.5m. Genco argues the pricing implies a “fire sale,” with several ships, including newer and larger units, valued below broker estimates.

 

The company also raised concerns over execution certainty. While Diana stated it had secured $1.433bn in committed financing, Genco noted that publicly disclosed commitments appear closer to $1.1bn, pointing to a potential funding gap.

 

Overall, Genco views the combination of undervaluation, discounted asset sales, and financing uncertainty as misaligned with shareholder interests, and insufficient to support the proposed transaction.

 

Picture: Genco