Economou launches cash tender offer for Performance Shipping shares
George Economou’s pursuit of Performance Shipping continues. The Greek shipping magnate has launched a tender offer for all outstanding shares of common stock of the New York-listed tanker owner at $3 per share in cash.
Andreas Michalopoulos-led Performance’s US security exchange filing shows Economou with an 8.8% stake based on the company’s 11.7m shares outstanding as of September 29, 2023, and he is currently holding around 1.03m shares, which he picked up for $1.48m.
Economou’s offer via his investment vehicle, Sphinx, a subsidiary of Maryport Navigation, is valid until November 8, unless extended. It represents a premium of 78.6% over Performance Shipping’s closing share price of $1.68 on October 10, 2023. The company’s stocks shot up on the news to close at $2.15 in recent trading on Wednesday.
The owner of more than 100 ships is after a board seat at Performance, which owns eight aframaxes, and is seeking resignations from four existing directors, including chief executive Michalopoulos.
Economou is proposing the election of former chairman of OceanFreight and ex-board member of Ocean Rig John Liveris at the next annual meeting of shareholders. If elected, Liveris would succeed the current chairperson and Performance’s controlling shareholder, Aliki Paliou, whose current term on the board expires next year.
Sphinx said in a regulatory filing that if the offer is consummated it will have designated a majority of the members of the board and have acquired at least a majority of the issued on a fully diluted basis, which will represent at least a majority of the voting power of the company securities, and the shares will be the sole company securities outstanding having the right or purporting to have the right to vote with respect to the election of directors.
“If, and to the extent that, the offeror (Sphinx) acquires control of the company, it intends to conduct a review, subject to applicable law, of the company and its assets, corporate structure, capitalisation, operations, properties, policies, management and personnel and consider and determine what, if any, changes would be desirable in light of the circumstances which then exist,” the company added.
Performance Shipping, formerly Diana Containerships, previously accused Economou of “stealthily” taking a large position in its stock and proceeding with increasingly aggressive actions towards the company and that although it is open to engaging with him, the company “can only assume the worst”.
Economou has also made a move on another Palios family-linked shipowner, OceanPal, a spinoff of bulker owner Diana Shipping led by Semiramis Paliou. He holds about 9% stake in the company, owning three panamaxes and a pair of capes estimated to be worth close to $61.5m.
The stake in OceanPal gives Economou the right to discuss various aspects of the company, including the board composition, management, operations, strategic plans, and he may also seek to explore increasing his ownership through open market purchases or buying from other stockholders.
