Genco Shipping & Trading Rejects Non-Binding Indicative Proposal from Diana Shipping Inc.

Core Viewpoint - Genco Shipping & Trading Limited's Board of Directors unanimously rejected Diana Shipping Inc.'s proposal to acquire Genco shares at $20.60 per share, citing significant undervaluation and execution risks associated with the proposal [1][2][4]. Summary by Sections Proposal Rejection - The Genco Board, with independent advisors, determined that Diana's proposal significantly undervalues the company and is not in the best interest of shareholders [2][11]. - The proposed purchase price is below Genco's net asset value and its 10-year high stock price of $26.93 [3][11]. Execution Risks - The Board highlighted considerable execution risks due to Diana's high leverage profile, lack of committed financing, and the substantial borrowing required to complete the transaction [4][12]. - Diana's proposal lacks the necessary structure and certainty to warrant further engagement [2][13]. Genco's Strategy - Genco's strategy focuses on maximizing shareholder value through sizeable quarterly dividends, low financial leverage, and opportunistic fleet renewal [5][13]. - The company has delivered $7.065 per share in dividends over the last six years, representing nearly 40% of the current share price [16]. Alternative Transaction Structure - Genco proposed an alternative structure where it would acquire Diana using cash and its superior equity currency, which could create value for both companies' shareholders [6][20]. - The combined company would benefit from increased scale, owning 83 drybulk vessels, and would be positioned to capitalize on a strengthening market [21]. Financial Position and Governance - Genco's strong balance sheet and low cash flow breakeven rate of approximately $10,000 per vessel per day, compared to Diana's $16,000, would enhance financial flexibility and dividend capacity [21][22]. - Genco is recognized for its strong corporate governance and transparency as a U.S.-headquartered company [22]. Market Position - The combined entity would have a net asset value exceeding $1 billion, with Genco's market capitalization approximately four times that of Diana [22]. - Genco's superior equity valuation and operational capabilities position it favorably in the drybulk industry [20][22].