Eagle Bulk adopts poison pill as it buys out Oaktree in $219m deal
US-based Eagle Bulk Shipping has bought Oaktree’s 28% stake in the company for $219.3m via a repurchasing program and adopted a shareholder rights plan preventing a takeover.
Eagle Bulk said that it bought approximately 3.8m shares of Eagle common stock for a purchase price of $58 per share.
Additionally, the company announced that it adopted a limited-duration shareholder rights plan. According to Eagle, the rights plan will reduce the likelihood that any person or group gains control of the company through open market accumulation, or other abusive tactics potentially disadvantaging the interests of all shareholders.
The plan is effective immediately and has a one-year duration expiring on June 22, 2024, unless extended by shareholders.
The repurchase of the shares came after John Coustas-led Danaos quietly accumulated close to a 10% stake in Eagle Bulk Shipping in recent months.
More precisely, Danaos picked up around 1.37m shares, equal to 9.99% of the Gary Vogel-led bulker owner’s stake after Eagle Bulk shares fell by around 20% since March due to weaker first-quarter earnings and a precipitous decline in charter rates.
“Today’s transaction is in the best interest of our shareholders, both financially and strategically. It ensures that shareholders maintain the opportunity to realize the value of their investment in Eagle Bulk and eliminates any potential disruption resulting from the sale of very significant interest in the company,” said Eagle’s chairman Paul Leand.
“Looking ahead, we will continue to execute our growth and renewal strategy, including building upon our 33 previous ship acquisitions, and remain committed to acting opportunistically to create value for all of our shareholders,” Eagle’s CEO Gary Vogel added.
The company stated that it has total liquidity of approximately $188m based on March 31, 2023, financials, as adjusted for this transaction, previously communicated financing, and vessel sale and purchase activity.
As a result of this transaction, Eagle’s outstanding common stock will be reduced to approximately 9.3m shares. The transaction will be financed by cash-on-hand and drawings under the company’s credit facility.
