Genco Blasts Diana Shipping's 'Lowball' Tactics in Board Takeover Bid
Proxy fight escalates after Genco's board rejected a $20.60 per-share offer, with Diana nominating six directors to force a sale.
A boardroom battle is brewing in the dry bulk shipping sector as Genco Shipping & Trading (NYSE: GNK) is now the target of a full-blown proxy fight initiated by its largest shareholder, Diana Shipping Inc. (NYSE: DSX).
Diana, which holds a 14.8% stake in Genco, announced its intention to nominate six candidates for election to Genco's Board of Directors. The aggressive move aims to replace the entire board and comes just weeks after Genco's current leadership unanimously rejected an unsolicited takeover bid from Diana.
In a sharply worded response, Genco’s board is urging its shareholders to reject Diana’s nominees, framing the maneuver as a strong-arm tactic to force through a sale at a price that undervalues the company. Genco stated in a press release that Diana's actions are "a transparent attempt to destabilize Genco and advance its self-serving efforts to acquire Genco at a lowball price."
The conflict ignited in November 2025 when Diana first proposed to acquire the outstanding shares of Genco for $20.60 apiece. Genco's board, after a thorough review with financial and legal advisors, formally rejected the offer in early January 2026, determining it was not in the best interests of the company and its shareholders.
The market’s valuation appears to be a central point of contention. While Diana's $20.60 offer represented a premium at the time, Genco's stock has performed well, trading near its 52-week high of $19.72. Shares of Genco were trading down about 1.8% at $19.52 in Friday afternoon trading. The company's current book value per share stands at $20.49, slightly below Diana's offer price. However, Wall Street analysts see significantly more upside, with a consensus price target of $22.90, which lends support to the Genco board's argument that the bid was inadequate.
As reported by the Wall Street Journal, Diana Shipping's move to nominate a full slate of directors is a classic activist strategy designed to force a change in corporate direction when an initial acquisition approach is rebuffed. If successful, a new board would almost certainly move to accept Diana's buyout offer or initiate a sale process.
This corporate drama is unfolding against a challenging backdrop for the dry bulk shipping industry. The sector has been grappling with volatile freight rates, weakening demand from China's property sector, and geopolitical disruptions that have rerouted vessels and increased operational costs. In this environment, scale and operational efficiency are paramount, driving a push for consolidation among carriers seeking to strengthen their market position.
Genco has pursued its own strategic plan, focusing on a comprehensive value strategy that includes fleet modernization, deleveraging its balance sheet, and returning capital to shareholders through dividends. With a market capitalization of approximately $847 million, Genco is a considerably larger entity than Diana, which has a market cap of around $206 million.
The fate of Genco's leadership and its strategic path will now be decided by its shareholders at the company's upcoming annual meeting. Investors will have to weigh the certainty of Diana's cash offer against the current board's long-term vision and its performance in navigating the turbulent waters of the global shipping market. The outcome will serve as a bellwether for shareholder activism and consolidation trends within the capital-intensive shipping industry.