According to shipping industry news, the highly anticipated acquisition saga between Genco Shipping & Trading Limited (hereinafter referred to as “Genco”) and Diana Shipping has seen new developments.
Specifically, ahead of Genco’s annual shareholder meeting on June 18, Genco has taken action to assure shareholders regarding its controversial “Rights Plan” (also known as the “Poison Pill” plan), pledging to limit its use.
Over the past few weeks, Genco’s board and management have held extensive meetings with Genco shareholders, sharing views on the company, prospects for future growth and value creation, and the upcoming annual meeting. In light of these discussions and to ensure the board protects the interests of all Genco shareholders, the board has made commitments regarding the “Rights Plan.”
On June 11 local time, Genco announced that the board will regularly review the “Rights Plan” and consider whether the facts and circumstances at that time warrant its continuation or termination. Genco committed that any extension of the “Rights Plan” following shareholder approval will not exceed 12 months, and pledged to seek shareholder approval before adopting any future “Rights Plan” lasting more than one year.
Genco emphasized its commitment to ensuring shareholders can evaluate credible acquisition proposals under specific circumstances. The Genco board further pledged to consider any acquisition proposals in good faith, including offers from Diana Shipping or other parties.
Genco stressed that if Diana Shipping submits an offer that fully reflects Genco’s total value (NAV) and an appropriate control premium, the board remains willing to meet with Diana Shipping again.
The Genco board is committed to strong corporate governance and shareholder engagement, which underpins the board’s structure and ongoing actions, including board composition, the formulation and implementation of a comprehensive value strategy for the company’s success, and the approach to responding to Diana Shipping’s hostile takeover.
The Genco board firmly believes that maintaining the “Rights Plan” remains necessary at this time. Without the protection of the “Rights Plan,” Diana Shipping would have the opportunity to gradually gain control of the company without paying a premium. This, in turn, would put Genco shareholders’ investments at risk.
As of June 12 local time, Genco’s stock closed at $24.06 per share. Previously, on May 11, Genco’s stock reached a near 52-week high of $27.25, with a near 52-week low of $12.84.
In short, the outcome of the June 18 shareholder meeting is expected to determine whether Diana Shipping will continue to pursue Genco or reassess its position.
