Diana Shipping Reduces Genco Stake Below 10% Following Abandoned Takeover Bid

Diana Shipping has commenced divesting its stake in Genco Shipping & Trading, with recent sales pushing its ownership below the 10% threshold. This development occurs weeks after the company abandoned its effort to acquire the US-listed dry bulk shipowner, according to gCaptain.

SEC filings indicate that Diana sold 285,707 Genco shares between 27 August and 2 September, reducing its total position to approximately 4.13 million shares. These sales reportedly generated around $7.5 million. In its latest Form 4 filing, Diana stated it is "no longer a 10% beneficial owner" and characterised the disclosure as an "exit filing."

Context of Previous Bid and Proxy Fight

This reduction in stake follows a protracted takeover and proxy battle between the two prominent dry bulk sector companies. Diana withdrew its acquisition proposal on 14 August, citing an inability to agree on valuation with Genco. Diana's final offer consisted of $24.80 in cash plus one Diana share. Genco had sought a package that Diana valued at approximately $36.91 per share.

Diana had publicly described Genco's demands as unrealistic and accused Genco's board of prioritising management protection over maximising shareholder value. At the time of withdrawing the bid, Diana's CEO, Semiramis Paliou, stated the company would remain Genco's largest shareholder and would closely monitor its performance. She affirmed Diana's intention to hold Genco's board and management accountable for commitments regarding standalone value, dividends, and its Comprehensive Value Strategy.

Shareholder Backing for Genco Management

The dispute had previously escalated into a proxy fight earlier in the year. Genco shareholders largely supported management at the company's annual meeting in June. Nearly 90% of shares voted, excluding Diana's holdings, backed each of Genco's six director nominees. Shareholders also endorsed Genco's equity incentive plan and shareholder rights agreement, while rejecting proposals put forward by Diana, gCaptain reported.

Diana's recent share sales suggest a partial unwinding of the position it built during the takeover attempt. Despite these transactions, Diana still holds more than 4.1 million Genco shares, maintaining a significant shareholder presence. However, with Diana now below the 10% ownership threshold, its future movements in Genco's stock may be less transparent to the market.