Genco Shipping adopts 'poison pill' following Diana Shipping stake increase

US-listed dry bulk specialist Genco Shipping and Trading has adopted a “poison pill” in response to Diana Shipping’s recent increase in its stake in the company.

On 1 October, Genco disclosed that its board had implemented a limited-duration shareholder rights plan, effective immediately and set to expire in September 2026.

This move follows a SEC filing on 29 September, which showed that Semiramis Paliou-led Diana Shipping had raised its stake in Genco to 14.93% (6.41M shares). The previous filing in July indicated Diana controlled 9.99% of Genco’s shares.

According to Genco, the rights plan is intended to “reduce the likelihood that any entity, person, or group would gain control of or significant influence over the company through open-market accumulation or other tactics potentially disadvantaging the interests of all shareholders, without paying all shareholders an appropriate control premium.”

The company emphasised that the decision provides the board time to fulfil its fiduciary duties on behalf of all shareholders and does not prevent the board from considering any proposals.

Under the rights plan, Genco will issue one right per share of common stock outstanding as of the close of business on 13 October 2025. The rights generally become exercisable only if any entity, person, or group acquires beneficial ownership of 15% or more of the company’s common stock in a transaction not approved by the board.

The shipping industry has witnessed other public companies adopting “poison pill” strategies, with Eagle Bulk being a recent example following Danaos’ involvement in the company in 2023.

"Strategic investment"

Diana Shipping’s management described its investment in Genco as “strategic” during a recent earnings call. Management highlighted that Genco is a well-run dry bulk company trading at a discount to NAV compared with Diana, adding value to the acquisition.

Genco’s fleet consists of 43 vessels with an average age of 12.7 years and an aggregate capacity of approximately 4.62M dwt.

Notably, Diana Shipping has also observed that German diversified shipping group F Laeisz, a stakeholder in Diana, increased its position over the summer, signalling its intent to engage with the company’s board.