Diana Shipping (NYSE: DSX), the largest shareholder of Genco Shipping & Trading (NYSE: GNK), has withdrawn its proposal to acquire the remaining shares of Genco after the two sides failed to agree on valuation and deal terms.
Diana’s latest offer consisted of $24.80 in cash per Genco share, adjusted for Genco’s recently declared $0.80 dividend, plus one Diana share valued at $2.54 based on Diana’s 30-day volume-weighted average price as of June 16, 2026.
Diana said it continues to believe a combination with Genco has strong strategic and financial merit, but argued that demands made by Genco’s board created terms that no credible buyer could realistically satisfy.
Diana Rejects Genco Board’s Counterproposal
According to Diana, Genco’s board communicated its demands during a meeting with Genco’s financial adviser on August 13 and reiterated them in a letter dated August 14.
Diana Shipping said Genco sought consideration consisting of $27.50 per share in cash, $2.00 per share in future dividends and three Diana shares for each Genco share.
Based on Diana’s August 13 closing price of $2.47, Diana calculated that the proposal implied total consideration of approximately $36.91 per Genco share.
That would represent a 42% premium to Genco’s August 13 closing price and a 57% premium to its closing price on June 16, the day before Diana submitted its most recent offer.
Diana Shipping also estimated that issuing three of its shares for every Genco share would leave Genco shareholders owning approximately 47% of the combined company.
The company argued that Genco was therefore effectively seeking full net asset value in cash, future dividends and nearly half of the potential upside of the combined business.
Diana Shipping Criticizes Genco’s NAV Methodology
A major point of contention is the valuation methodology used by Genco.
Diana said its own proposals had relied on VesselsValue broker valuations, which it noted Genco itself had used for more than five years, including in its fourth-quarter 2025 earnings materials.
According to Diana, Genco later shifted toward other net asset value estimates and used vessel valuations from the shipbroking arms of Clarksons and Fearnleys to support a $27.50-per-share NAV.
Diana argued that this figure was significantly above equity analyst estimates of approximately $25.40 per share from Clarksons and $25.00 per share from Fearnleys, as well as Diana’s own estimate of roughly $25.00 based on VesselsValue data.
The shipping company also said Genco’s NAV calculation did not fully reflect costs that could arise from selling the fleet and liquidating the company, including brokerage fees and potential severance expenses.
Diana Accuses Genco Board of Misalignment With Shareholders
Diana Shipping sharply criticized Genco’s board and management, alleging that their position prioritizes management retention and control over maximizing shareholder value.
The company said Genco shareholders deserve an explanation of the financial analysis behind the board’s demands and how management plans to generate equivalent or superior value if Genco remains independent.
Diana also alleged that Genco spent nearly $17 million of shareholder funds during the first half of 2026 in connection with efforts it characterized as protecting management interests.
Genco has not been given a response in Diana’s announcement to the allegations regarding management incentives and valuation methodology.
Diana CEO Says Company Is ‘Not Going Away’
Diana Shipping CEO Semiramis Paliou said the company was disappointed that nine months of engagement and four proposals ultimately failed to produce an agreement.
She characterized Genco’s latest demands as unrealistic and said they effectively demonstrated that the board was unwilling to engage constructively on a transaction.
“We gave this process every opportunity to succeed, and Genco’s response has left us no choice but to withdraw our proposal at this time,” Paliou said.
However, she emphasized that Diana Shipping intends to remain active as Genco’s largest shareholder.
“We are not going away,” Paliou said, adding that Diana plans to continue monitoring Genco’s performance and holding its board and management accountable for commitments related to standalone value, dividend growth and its broader value strategy.
Focus Shifts Back to Genco’s Standalone Strategy
With Diana’s takeover offer withdrawn, investor attention is likely to shift back toward Genco’s ability to deliver on the standalone strategy it has promoted throughout the acquisition process.
Diana Shipping indicated that it will judge Genco against its commitments on shareholder returns, dividends and operating performance.
The withdrawal does not eliminate the possibility of future strategic activity, but for now it ends Diana’s latest attempt to acquire the shares of Genco it does not already own.
