Diana Shipping has started to reduce its stake in Genco Shipping & Trading, dropping below the 10% ownership mark just weeks after it ended its controversial attempt to acquire the U.S.-listed dry bulk shipping company.
According to SEC filings, Diana sold a total of 285,707 shares of Genco between August 27 and September 2, bringing its total holdings down to about 4.13 million shares.
The shares sold for around $7.5 million, confirming the decrease in Diana's stake to approximately 4.13 million shares.
More significantly, these sales have taken Diana's ownership below the 10% threshold. In its latest Form 4 filing, Diana stated that it is “no longer a 10% beneficial owner” and referred to the disclosure as an “exit filing.”
This shift marks a significant change in strategy after a lengthy and contentious takeover and proxy battle between two well-known companies in the dry bulk sector.
Diana withdrew its takeover offer on August 14 after the parties could not agree on the company's valuation. Diana's final offer included $24.80 in cash plus one share of Diana, while Genco proposed a package valued by Diana at about $36.91 per share.
Diana deemed Genco's requests unrealistic and pulled back its offer, accusing Genco's board of prioritizing management interests over maximizing shareholder value.
Despite withdrawing its bid, Diana made it clear that it was not stepping away from its interest in Genco.
“I want to emphasize: we are not going away,” said Diana CEO Semiramis Paliou. She indicated that Diana would remain Genco's largest shareholder, continue to monitor its performance closely, and hold the board and management accountable for their commitments related to standalone value, dividends, and its Comprehensive Value Strategy.
Earlier in the year, the conflict had already led to a proxy fight. At Genco's annual meeting in June, shareholders overwhelmingly supported the management, with nearly 90% of votes (excluding Diana's shares) favoring all six of Genco's nominated directors. They also backed Genco's equity incentive plan and shareholder rights agreement while rejecting Diana's proposals.
Diana's recent share sales suggest it is starting to unwind the position it built during the takeover battle. However, with over 4.1 million shares still owned after these transactions, Diana remains a significant shareholder.
It is unclear whether Diana plans to hold onto this position or continue selling its shares. Now that it is below the 10% threshold, tracking its next moves could become more complicated.