Diana Shipping secures $27.34/share financing for Genco takeover bid

Diana Shipping secured an extension of fully committed financing from DNB Carnegie and Nordea to back its $27.34-a-share hostile bid for Genco Shipping & Trading, intensifying a takeover battle that has stretched into its third month.

"The extension is a further demonstration of Diana's commitment to completing a transaction and of its banking partners' confidence in the strength and credibility of Diana's proposal," Semiramis Palio, chief executive officer of Diana Shipping, said in a statement.

The offer comprises $24.80 in cash and one Diana share valued at $2.54. Diana, already the largest Genco shareholder with a 14% stake, said it has received tenders for more than 10.5 million shares, or over 28% of the outstanding stock. The tender offer has been extended to July 10.

The outcome hinges on whether Diana can secure enough additional shares to force a deal against a board that has unanimously rejected the bid as inadequate. Genco's board argues the offer undervalues the company's assets and excludes a control premium, while pursuing what it calls a "Comprehensive Value Strategy" of dividends and organic growth.

Genco has pushed back aggressively, accusing Diana of "gamesmanship" and saying the Greek shipper has only extended the cash portion of the offer at $24.80 without filing an amended tender offer statement reflecting the increased price. "It is perplexing that this is still being offered, as it is even below Diana's subsequent non-binding indicative proposal," Genco said.

The battle for Genco is unfolding against a backdrop of consolidation in the dry bulk shipping sector, where volatile freight rates and aging fleets have pushed operators to seek scale through mergers. A combined Diana-Genco entity would control more than 100 dry bulk vessels, creating one of the largest fleets in the sector.

The involvement of DNB, Norway's largest bank, and Nordea, the Nordic region's biggest lender, adds credibility to Diana's financing — a factor that could sway institutional shareholders who have yet to tender their shares. Diana's shares closed at $2.01 on the New York Stock Exchange, while Genco's stock has traded above the cash offer price in recent weeks, suggesting some investors expect a higher bid.

The next milestone is July 10, when the extended tender offer expires. If Diana fails to secure enough shares by then, it could either raise its bid or walk away. If it succeeds, it would gain control of Genco's fleet of more than 50 dry bulk vessels, complementing its own 44-vessel portfolio.

This article is for informational purposes only and does not constitute investment advice.