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

By Svea Herbst-Bayliss

NEW YORK, Jan 16 (Reuters) - Global shipping company Diana Shipping DSX.N said on Friday that it plans to launch a proxy fight to replace rival Genco Shipping & Trading's GNK.N six current directors, making its decision just days after the board rejected Diana's takeover offer.

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, the company said, confirming earlier reporting by Reuters.

Genco said the board's Nominating and Corporate Governance Committee "will review the proposed nominees in accordance with the company’s standard process and guidelines," adding that it will act in the best interest of shareholders.

Diana said it 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.

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

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.

Genco said it had "thoroughly" reviewed Diana's proposal with external advisory help and determined it significantly undervalued Genco. During the due diligence, however, Genco realized that both companies' shareholders would benefit if Genco bought Diana instead and reached out to make this suggestion.

Genco's stock slipped 1.16% on Friday, having climbed 38% in the last 12 months.