Genco Takeover Battle
Genco Board Rejects Cash Offer, Reviews Diana's Enhanced Stock-and-Cash Proposal
Anonymous
Key Points
1
Diana has pursued two distinct paths toward Genco: a mandatory cash tender offer at 24.80 per share and an indicative non-binding proposal to acquire Genco for 24.80 in cash plus one share of Diana stock (with Diana implying a higher 27.34 per share value in disclosures).
2
Genco’s board previously reviewed and unanimously rejected the cash-only tender, saying it undervalued the company, was below its net asset value, and lacked a control premium; it is now carefully reviewing Diana’s separate non-binding proposal to maximize value under fiduciary duties.
3
Tender activity shows substantial shareholder engagement: as of late June, about 10,583,484 Genco shares (roughly 28.4% of the outstanding shares not owned by Diana) were tendered, while Diana itself owns more than 14% of outstanding shares; Diana later disclosed an increased offer that remains on the table but has yet to elicit a board response.
4
Analysts and investors are watching whether the board will engage on Diana’s value-creative proposition; the company emphasizes that the active open cash bid remains the sole active offer while the non-binding, mixed-consideration proposal is under fiduciary review with advisors to assess potential value creation for shareholders.
Genco Shipping and Trading (NYSE: GNK) has told shareholders not to tender their shares into Diana Shipping's active cash offer of $24.80 per share, calling the bid misleading and undervalued. Business Insider Markets reported that Genco's board unanimously rejected the cash-only tender, saying it falls below the company's net asset value and offers no control premium.
Diana is pursuing two separate paths to acquire Genco. The first is the live cash tender at $24.80 per share. The second is a non-binding proposal to buy Genco for $24.80 in cash plus one Diana share — which Diana values at roughly $27.34 per share combined. Genco's board is now reviewing that second proposal under its fiduciary duties.
Genco Board Slams Cash Offer as Too Cheap
Genco's board reviewed Diana's $24.80 cash tender and rejected it unanimously. The board said the price undervalues the company and fails to reflect what a buyer should pay to gain control. In takeover deals, buyers typically pay a "control premium" — extra money on top of market price. Genco says Diana's offer includes none of that, according to Market Screener UK.
Genco also accused Diana of making misleading disclosures in its tender offer materials. The company expressed "disappointment" in how Diana presented information to shareholders. Genco urged investors to take no action on the cash bid while its advisors complete their review of the mixed-consideration alternative proposal.
Tens of Millions of Shares Already Tendered by Shareholders
Despite the board's rejection, significant shareholder activity has already taken place. As of late June, about 10,583,484 Genco shares had been tendered into Diana's cash offer. That equals roughly 28.4% of Genco shares not already owned by Diana. Diana itself holds more than 14% of Genco's outstanding shares, according to Quiver Quant.
Diana has pointed to this tender activity as proof that shareholders want the board to engage. The company has publicly called on Genco's board to enter negotiations for what it describes as a "value-creative transaction." Diana's elevated mixed-consideration offer remains on the table, but Genco's board has not yet responded.
Two Offers, One Active Bid — What Shareholders Must Know
Genco has been careful to draw a clear line between Diana's two approaches. The cash tender at $24.80 per share is the only legally active offer right now. The second proposal — $24.80 in cash plus one Diana share — is non-binding and indicative only. Genco says no investor should confuse the two, according to Business Insider Markets.
Diana has implied the combined package is worth about $27.34 per share based on its own stock valuation. Genco has not confirmed or accepted that figure. The board is working with advisors to weigh whether any version of a deal could create enough value to meet its fiduciary duty to shareholders.
Analysts Watch for Genco's Next Move on Diana's Proposal
Markets and analysts are closely watching whether Genco's board will engage with Diana's mixed-consideration proposal. The board has committed to "maximizing shareholder value" but has given no timeline for a decision. TradingView noted that the board is reviewing the proposal alongside performance data, market conditions, and its legal obligations.
Genco is the largest U.S.-headquartered drybulk shipowner. It focuses on moving commodities like grain, coal, and iron ore around the world. Any deal with Diana would create a major combined force in the dry bulk shipping sector. For now, shareholders are advised to hold and wait for the board's formal response.
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