Diana Shipping has allowed its hostile tender offer for US dry bulk rival Genco Shipping & Trading to expire as the July 24 deadline passed, but the Athens-based owner is keeping its separate $27.34-per-share takeover proposal on the table, according to Splash247.
Tender Offer Expiration
Around 11.78 million shares had been tendered and not withdrawn at the deadline, representing 31.6% of Genco stock outside Diana's holding, the company said. That support was not enough to hand Diana control, and all tendered shares will now be returned. Diana noted a last-minute system error involving a change of CUSIP number may have affected the final count, according to Splash247.
The hostile tender, launched in May, offered $24.80 per share in cash. Diana's separate non-binding proposal to Genco's board remains at an implied $27.34 per share, comprising the same cash payment plus one Diana share valued by the bidder at $2.54.
Stalled Talks and Accusations
Diana accused Genco of dragging out the process and misrepresenting the level of contact between their advisers. The Semiramis Paliou-led company said just two calls had taken place since it raised its proposal on June 17 and called for direct negotiations now that the tender has ended.
Genco hit back later on Monday, saying its advisers had discussed the price, structure and terms of the proposal with Diana's team and that its board would continue reviewing the offer.
Valuation Disputes
The New York-listed owner disputed Diana's claim that its fleet value had fallen by around $51 million since early June. Genco said broker valuations obtained this month showed vessel prices were still rising and maintained that any takeover would need to include a control premium above net asset value.
Genco also again questioned the value of the stock component, noting that Diana shares closed at $2.25 on July 24, below the $2.54 figure used in the proposal. The company raised concerns over dilution and Diana's agreement to sell 16 Genco ships to Star Bulk for $470.5 million if the takeover goes through.
| Aspect | Tender Offer (Expired) | Current Proposal (Non-binding) |
|---|---|---|
| Price per share | $24.80 cash | $27.34 implied ($24.80 cash + 1 Diana share @ $2.54) |
| Status | Expired July 24 | On the table; not accepted |
| Shares tendered | 11.78m (31.6% of outside stock) | N/A |
| Diana stake | ~14.4% | ~14.4% |
| Key condition | None | Pending Genco board review |
Analyst Perspective
Shipping analysts at Scandinavian bank SEB said Genco's poison pill, which caps Diana's stake at 15%, meant the tender was always more of a pressure tactic than a route to control. They viewed its withdrawal as a tactical move that removes one of Genco's arguments for avoiding talks on the higher proposal. The 31.6% tendered gives Diana added leverage, although Genco still controls the timetable and can hold out for better terms.
Implications for the Dry Bulk Market
While the immediate operational impact on freight rates or vessel supply remains neutral, the ongoing takeover saga signals potential consolidation in the dry bulk sector. Diana owns 14.4% of Genco and remains its largest shareholder. The failure to win board seats in June, with shareholders re-electing all six incumbent directors, demonstrates the challenge of gaining control through tender offers alone. If Diana eventually succeeds at a higher price, combined fleet scale could influence dry bulk chartering dynamics, but for now, Genco continues as an independent operator.
Watch List
- Genco board response: Will the board engage in direct negotiations on the $27.34 proposal?
- Poison pill expiry: Any change to the 15% cap could shift leverage.
- Fleet sale clause: Star Bulk's $470.5 million agreement for 16 Genco ships hangs on takeover completion.
- Diana share price: The stock component value ($2.25 vs $2.54) remains a sticking point.
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