Star Bulk Completes Merger With Eagle Bulk
- Merger creates a global leader in dry bulk shipping
- Shareholders received 2.6211 shares of Star Bulk common stock for each share of Eagle common stock
- Eagle common stock will no longer be listed on the NYSE
- New appointments in the leadership team to aid business integration
- None.
The merger between Star Bulk Carriers Corp. and Eagle Bulk Shipping Inc. represents a significant consolidation in the dry bulk shipping industry. This sector is known for its volatility, driven by fluctuating demand for commodities and varying shipping rates. With this merger, Star Bulk is likely to achieve economies of scale, potentially lowering operational costs and improving bargaining power with customers and suppliers.
From a market perspective, the increase in scale can lead to improved efficiency and cost management. Investors typically favor such strategic moves as they can lead to enhanced revenue streams and a more robust competitive position. The exchange ratio of 2.6211 Star Bulk shares for each Eagle share will have implications for shareholder value, which requires careful analysis of the pre-merger valuations of both companies to assess the fairness of the deal.
Financially, the cessation of Eagle's stock trading and the shift to Star Bulk's common stock will have immediate liquidity implications for former Eagle shareholders. They must now adapt to the trading patterns and performance metrics of Star Bulk. The merger's impact on Star Bulk's balance sheet should be closely monitored, particularly regarding how the combined entity manages the debt and assets acquired from Eagle.
Furthermore, the integration of companies post-merger is a complex and financially critical process. The appointment of an interim Senior Advisor for business integration highlights the importance of a smooth transition. Missteps in this area can lead to unexpected costs and disruptions in operations. Investors should watch for the realization of projected synergies and whether these translate into improved financial ratios and stock performance in the short to medium term.
The involvement of multiple high-profile legal advisors underscores the complexity and significance of the merger. Compliance with regulations, both domestic and international, is paramount in the shipping industry, which is heavily regulated. The legal structure of the merger will have been designed to optimize tax implications, regulatory compliance and corporate governance.
Shareholders should be aware that mergers can attract regulatory scrutiny and may face challenges if any anti-competitive concerns are raised. The legal expertise employed here suggests a thorough due diligence process, which is reassuring for stakeholders. Nonetheless, the long-term success of the merger will depend on how effectively the new leadership team navigates post-merger integration from a legal standpoint, including harmonizing corporate policies and adhering to international shipping laws.
ATHENS, Greece, April 09, 2024 (GLOBE NEWSWIRE) -- Star Bulk Carriers Corp. (“Star Bulk”) (Nasdaq: SBLK), a global shipping company focusing on the transportation of dry bulk cargoes, today announced that it has completed its merger with Eagle Bulk Shipping Inc. (“Eagle”).
Under the terms of the merger agreement, each Eagle shareholder received 2.6211 shares of Star Bulk common stock for each share of Eagle common stock owned. Eagle common stock has ceased trading and will no longer be listed on the New York Stock Exchange.
Petros Pappas, Chief Executive Officer of Star Bulk, said, “This is an exciting day for Star Bulk as we bring together our companies and create a global leader in dry bulk shipping. We are moving forward with greater scale, a stronger financial profile and unique technical and commercial capabilities to grow our business, better serve our customers and deliver sustainable value for our shareholders.”
Board and Leadership Team Appointments
In connection with the closing of the merger, Gary Weston has joined the Star Bulk Board of Directors, Bo Westergaard has joined Star Bulk’s new leadership team and Costa Tsoutsoplides will serve as interim Senior Advisor to assist with business integration.
Advisors
Cravath, Swaine & Moore LLP served as legal counsel to Star Bulk. Houlihan Lokey served as financial advisor to Eagle and Akin Gump Strauss Hauer & Feld LLP served as legal counsel to Eagle and Hogan Lovells US LLP served as legal counsel to the Board of Directors of Eagle.
About Star Bulk
Star Bulk is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. Star Bulk’s vessels transport major bulks, which include iron ore, minerals and grain, and minor bulks, which include bauxite, fertilizers and steel products. Star Bulk was incorporated in the Marshall Islands on December 13, 2006 and maintains executive offices in Athens, New York, Limassol, Singapore, Germany and Denmark. Its common stock trades on the Nasdaq Global Select Market under the symbol “SBLK”. As of April 9, 2024, Star Bulk has a fleet of 163 owned vessels, with an aggregate capacity of 15.6 million dwt, consisting of Newcastlemax, Capesize, Post Panamax, Kamsarmax, Panamax, Ultramax and Supramax vessels with carrying capacities between 53,489 dwt and 209,537 dwt.
Cautionary Statement Regarding Forward Looking Statements
This press release contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Star Bulk has identified some of these forward-looking statements with words like “believe,” “may,” “could,” “would,” “might,” “possible,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “estimate,” “potential,” “outlook” or “continue,” the negative of these words, other terms of similar meaning or the use of future dates. Forward-looking statements in this press release include without limitation, statements about the benefits of the transaction, including future financial and operating results and synergies and Star Bulk’s plans, objectives, expectations and intentions. Such statements are qualified by the inherent risks and uncertainties surrounding future expectations generally, and actual results could differ materially from those currently anticipated due to a number of risks and uncertainties. Risks and uncertainties that could cause results to differ from expectations include: the effects of disruption caused by the announcement of the transaction making it more difficult to maintain relationships with employees, customers, vendors and other business partners; the possibility that the expected synergies and value creation from the transaction will not be realized, or will not be realized within the expected time period; risks related to Star Bulk’s ability to successfully integrate Eagle’s operations and employees; the risk that the anticipated tax treatment of the proposed transaction between Star Bulk and Eagle is not obtained; other business effects, including the effects of industry, economic or political conditions outside of the control of the parties to the transaction; actual or contingent liabilities; and other risks and uncertainties discussed in Star Bulk’s and Eagle’s filings with the SEC, including in “Part I. Item 3. Key Information D. Risk Factors” of Star Bulk’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023, “Part I. Item 1A. Risk Factors” of Eagle’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and Star Bulk’s subsequent current reports on Form 6-K. You can obtain copies of these documents free of charge from the Securities and Exchange Commission’s website at https://www.sec.gov. Star Bulk does not undertake any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law. All forward-looking statements in this press release are qualified in their entirety by this cautionary statement.
Contacts | |
| Investor Relations: Simos Spyrou, Christos Begleris Co ‐ Chief Financial Officers Star Bulk Carriers Corp. c/o Star Bulk Management Inc. 40 Ag. Konstantinou Av. Maroussi 15124 Athens, Greece Email: info@starbulk.com www.starbulk.com | Financial Media: Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, NY 10169 Tel. (212) 661‐7566 E‐mail: starbulk@capitallink.com www.capitallink.com Jim Golden / Tali Epstein / Jack Kelleher Collected Strategies StarBulk-CS@collectedstrategies.com |
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