Eagle Bulk Shipping Inc. (NYSE: EGLE) experienced a notable surge of 7.06% in after-market trading on Monday, following a 2.99% increase during the regular session, concluding at $46.19. This upward momentum in EGLE stock was instigated by the revelation of a significant merger deal.
Eagle Bulk Shipping Inc. (EGLE) formalized a definitive agreement to unite with Star Bulk Carriers in an all-stock merger. The agreement, structured on a Net Asset Value to Net Asset Value (“NAV”) basis, denotes a pro forma market capitalization of approximately $2.1 billion.
Unanimously sanctioned by the boards of directors of both entities, the terms of the agreement dictate that Eagle Bulk shareholders will receive 2.6211 shares of Star Bulk common stock for each Eagle common stock share held. This equates to a total consideration of around $52.60 per share, presenting a 17% premium based on EGLE’s closing share price of $44.85 on December 8, 2023.
Following the completion of the transaction, Star Bulk and Eagle Bulk shareholders will possess approximately 71% and 29% of the amalgamated company on a fully diluted basis, respectively. The amalgamation of Star Bulk and Eagle Bulk is poised to establish a preeminent global entity in the dry bulk shipping sector, boasting a sizable, diversified, and scrubber-fitted fleet.
The combined entity, comprising 169 owned vessels, is anticipated to realize substantial synergies, fortifying its financial standing. Leveraging the technical and commercial fleet management capabilities of both entities, the amalgamated company aims to enhance operational efficiency, fulfill health, safety, and environmental objectives, and maximize profit potential.
Upon completion of the merger, the combined company will emerge as the largest U.S.-listed dry bulk shipping enterprise, with a fleet of 169 owned vessels on a fully delivered basis. The leadership mantle will be retained by the existing management team of Star Bulk, complemented by select senior executives from Eagle Bulk.
Operating under the banner of Star Bulk Carriers Corp., the company will be headquartered in Athens, Greece, while maintaining offices in Stamford, Connecticut; Singapore; Copenhagen; and Limassol.