Diana Shipping plans proxy fight at Genco, ready to nominate 6 directors, sources say

Global shipping company Diana Shipping plans to launch a proxy fight to replace rival Genco Shipping & Trading's six current directors, making its decision just days after the board rejected Diana's takeover offer, two people familiar with the matter said.

Diana Shipping, which owns nearly 15% of Genco and proposed buying all outstanding shares for $20.60 per share in cash, will nominate executives who have shipping and maritime industry experience in the coming days, one of the sources told Reuters.

A representative for New York City-based Genco was not immediately available to comment.

Diana now wants to give Genco shareholders an opportunity to elect newcomers to the board who would be open to exploring alternatives, including reviewing Diana's proposal to buy Genco, said one of the sources who was not authorized to speak publicly about the company's plan.

Earlier this week, Genco rejected Diana's indicative proposal which was made on November 24 and represented a 15% premium to Genco's closing price on November 21.

Genco's stock closed at $19.88 on Thursday. It has climbed 36% in the last 12 months.

Diana expressed disappointment that Genco's board took six weeks to respond to its offer and still believes shareholders would benefit if the two companies combined their platforms, pushing for consolidation in the dry bulk carriers sector, one of the sources said.