Star Bulk Walks Away from Deal to Buy Genco Bulkers from Diana
Another piece of the proposed deal for Diana Shipping to acquire Genco Shipping & Trading has ended with Star Bulk Carriers Corp. announcing that it decided to withdraw from the vessel purchase agreement with Diana. Another major bulker operator, Star Bulk, had agreed to buy 16 of Genco’s vessels from Diana with the closing of the merger, which would have provided another element of financing for the deal.
Diana said that it respected Star Bulk’s decision and thanked them for their role. At the same time, it asserted that its offer to acquire the remaining shares of Genco “remains on the table.” It asserted that Star’s decision “has no effect” on the committed $1.4 billion in financing in place from six international banks for the proposed Genco transaction.
Star Bulk’s decision to withdraw comes weeks after Diana permitted its tender offer for Genco’s shares to expire. Diana had also failed to win shareholder support in its efforts to place alternate directors on Genco’s board.
Petros Pappas, CEO of Star Bulk, commented that they had been proud to support Diana and still called the proposed merger a compelling opportunity to create significant value for Genco shareholders. He said Star continued to believe in the financial and strategic merits of Diana’s efforts.
The merger would have brought together two similarly sized fleets to create one of the largest owners and operators of dry bulk carriers. Both companies agreed the sector is in a strong upcycle, but Diana asserts Genco’s board has never engaged in a serious discussion.
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“We are grateful to Star Bulk for their partnership and support throughout this process, and we respect their desire to move on at this time. The termination of the agreement eliminates one of Genco’s concerns regarding our proposal, and our fully financed offer remains on the table,” said Semiramis Paliou, Diana’s Chief Executive Officer. “We continue to call on the Genco Board to engage with us directly and in good faith to reach a transaction that delivers full and fair value to all Genco shareholders.”
Genco has repeatedly called the offers too low, not reflecting the net asset value of the fleet and the need for a control premium. It had asserted that the sale of ships to Star Bulk was also undervaluing its assets. Genco has not officially rejected Diana’s last offer of $24.80 in cash and one share of Diana stock.
