Star Bulk Carriers Corp. (“Star Bulk”) (Nasdaq: SBLK), a global
shipping company focusing on the transportation of dry bulk
cargoes, and Eagle Bulk Shipping Inc. (NYSE: EGLE) (“Eagle”), one
of the world’s largest owner-operators within the midsize dry bulk
vessel segment, today announced that the companies have entered
into a definitive agreement to combine in an all-stock merger on a
Net Asset Value to Net Asset Value (“NAV”) basis with a pro forma
market capitalization of approximately $2.1 billion1.
Under the terms of the agreement, which was unanimously approved
by the boards of directors of both companies, Eagle shareholders
will receive 2.6211 shares of Star Bulk common stock for each share
of Eagle common stock owned. This represents a total consideration
of approximately $52.60 per share, a 17% premium based on Eagle’s
closing share price of $44.85 on December 8, 2023. Upon the close
of the transaction, Star Bulk and Eagle shareholders will own
approximately 71% and 29% of the combined company on a fully
diluted basis, respectively.
Petros Pappas, Chief Executive Officer of Star Bulk, commented,
“Bringing together Star Bulk and Eagle will create a global leader
in dry bulk shipping with a large, diversified, scrubber fitted
fleet. Together we will benefit from greater scale with 169 owned
vessels, generating meaningful synergies and building an even
stronger financial profile. We will leverage both companies’
technical and commercial fleet management capabilities to optimize
performance, deliver on our health, safety, and environmental
objectives and maximize earnings potential. With a well-capitalized
balance sheet, we aim to continue delivering strong cash returns to
shareholders while investing in emission reduction technologies as
we continue to pursue growth over the long term. We look forward to
working with the talented Eagle team to successfully integrate the
two companies.”
Gary Vogel, Eagle Chief Executive Officer, said, “We are very
excited to be joining forces with Star Bulk, uniting two
best-in-class companies, both commercially and operationally. We
are bringing together two highly complementary organizations and
are confident that this accretive merger with Star Bulk will unlock
significant value for Eagle shareholders, including the opportunity
to participate in the long-term upside of the combined
company.”
Strategic and Financial Benefits
- A Leading, Diversified Fleet of Scrubber-Fitted Vessels
with Greater Scale. The combined company will be the
largest U.S. listed dry bulk shipping company with a combined fleet
of 169 owned-vessels on a fully delivered basis, 97% of which are
fitted with Exhaust Gas Cleaning Systems (“scrubbers”), ranging
from Newcastlemax/Capesize to Supramax/Ultramax vessels and a
global market presence.
- Best-in-Class Technology-Driven Operations and
Management. Both companies employ fully integrated ship
management operations across commercial and technical management,
and Star Bulk will leverage Eagle’s expertise in the
Supramax/Ultramax sector to improve upon utilization and
performance.
- Strong Financial Profile and Capital Return
Framework: The combined company is expected to have
combined liquidity2 of nearly $420 million, as of September 30,
2023, and net leverage of approximately 37%3. Both companies expect
to maintain their respective dividend policies until the
transaction is completed. Following close, the combined company
expects to maintain Star Bulk’s current dividend policy.
- Significant Cost and Revenue Synergies. The
transaction is expected to generate at least $50 million in annual
cost and revenue synergies within 12-18 months following close
through commercial operations integration and economies of scale,
including reductions in general and administrative expenses.
- More Attractive Investment Proposition: The
combined company will have significantly increased pro forma market
capitalization and expected trading liquidity in the dry bulk
sector. With increased size and liquidity, the combined company
expects to reduce its cost of capital.
Leadership, Governance and Headquarters
The combined company will be led by the current management team
of Star Bulk and will be joined by certain senior executives of
Eagle. Upon close, Mr. Pappas will serve as CEO of the combined
company and Spyros Capralos, current Chairman of Star Bulk, will
serve as Chairman of the combined company’s Board. One member of
the Eagle Board will join the Star Bulk Board at closing.
The combined company will operate as Star Bulk Carriers Corp.
and will be headquartered in Athens, Greece, while maintaining
offices in Stamford, Connecticut; Singapore; Copenhagen; and
Limassol.
Timing and Approvals
The transaction is expected to close in the first half of 2024,
subject to approval by Eagle shareholders, receipt of applicable
regulatory approvals and satisfaction of other customary closing
conditions.
Conference Call and Webcast
Star Bulk and Eagle will host a joint conference call and
webcast today at 5:30 p.m. ET to discuss the transaction. The
conference call can be accessed by dialing 800-225-9448 within the
U.S. and 203-518-9708 for all non-U.S. locations. The confirmation
code is 75612.
A live webcast of the conference call will be accessible here:
https://event.on24.com/wcc/r/4436402/E60ACDC052D0D01D04A91F235C5D3125.
The webcast link and associated presentation materials will be
available on the investor relations section of each company’s
website: https://www.starbulk.com/gr/en/ir-overview/ and
https://ir.eagleships.com/.
Advisors
Cravath, Swaine & Moore LLP is serving as its legal counsel
to Star Bulk. Houlihan Lokey is serving as financial advisor to
Eagle and Akin Gump Strauss Hauer & Feld LLP is serving as
legal counsel to Eagle and Hogan Lovells US LLP is serving 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 and Germany. Its
common stock trades on the Nasdaq Global Select Market under the
symbol “SBLK”. As of December 8, 2023 and as adjusted for the
delivery of a) one agreed to be sold vessels to their new owner and
b) the two firm Kamsarmax vessels currently under construction,
Star Bulk operates a fleet of 117 vessels, with an aggregate
capacity of 13.2 million dwt, consisting of 17 Newcastlemax, 20
Capesize, 2 Mini Capesize, 7 Post Panamax, 41 Kamsarmax, 2 Panamax,
19 Ultramax and 9 Supramax vessels with carrying capacities between
53,489 dwt and 209,529 dwt.
In addition, as of the date of this release, Star Bulk has
entered into long-term charter-in arrangements with respect to four
Kamsarmax newbuildings and two Ultramax newbuildings which are
expected to be delivered during 2024 with an approximate duration
of seven years per vessel plus optional years. In addition, in
November 2021 Star Bulk took delivery of the Capesize vessel Star
Shibumi, under a long-term charter-in contract for a period up to
November 2028.
About Eagle Bulk Shipping Inc.
Eagle is a U.S.-based, fully integrated shipowner-operator,
providing global transportation solutions to a diverse group of
customers including miners, producers, traders and end users.
Headquartered in Stamford, Connecticut, with offices in Singapore
and Copenhagen, Eagle focuses exclusively on the versatile midsize
dry bulk vessel segment and owns one of the largest fleets of
Supramax/Ultramax vessels in the world. Eagle performs all
management services in-house (strategic, commercial, operational,
technical, and administrative) and employs an active management
approach to fleet trading with the objective of optimizing revenue
performance and maximizing earnings on a risk-managed basis. For
further information, please visit Eagle’s website:
www.eagleships.com.
Important Information and Where to Find It
This press release may be deemed to be solicitation material in
respect of the proposed transaction between Star Bulk and
Eagle. In connection with the proposed transaction, Star Bulk
intends to file with the Securities and Exchange Commission (the
“SEC”) a registration statement on Form F-4 that will include a
proxy statement of Eagle that also constitutes a prospectus of Star
Bulk. Star Bulk and Eagle may also file other documents with the
SEC regarding the proposed transaction. This press release is not a
substitute for the proxy statement/prospectus, Form F-4 or any
other document which Star Bulk or Eagle may file with the SEC.
Investors and security holders of Star Bulk and Eagle are
urged to read the proxy statement/prospectus, Form F-4 and all
other relevant documents filed or to be filed with the SEC
carefully when they become available because they will contain
important information about Star Bulk, Eagle, the transaction and
related matters. Investors will be able to obtain
free copies of the proxy statement/prospectus and Form F-4 (when
available) and other documents filed with the SEC by Star Bulk and
Eagle through the website maintained by the SEC
at www.sec.gov. Copies of documents filed with the SEC by Star
Bulk will be made available free of charge on Star Bulk’s investor
relations website
at https://www.starbulk.com/gr/en/ir-overview/. Copies of
documents filed with the SEC by Eagle will be made available free
of charge on Eagle’s investor relations website
at https://ir.eagleships.com.
No Offer or Solicitation
This press release is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Participants in the Solicitation
Star Bulk, Eagle and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the holders of Eagle securities in
connection with the proposed transaction. Information
regarding these directors and executive officers and a description
of their direct and indirect interests, by security holdings or
otherwise, will be included in the Form F-4 and proxy
statement/prospectus regarding the proposed transaction (when
available) and other relevant materials to be filed with the SEC by
Star Bulk and Eagle. Information regarding Star Bulk’s directors
and executive officers is available in Part I. Item 6. Directors,
Senior Management and Employees of Star Bulk’s Annual Report on
Form 20-F for the fiscal year ended December 31, 2022 filed with
the SEC on March 7, 2023. Information regarding
Eagle’s directors and executive officers is available in the
sections entitled Corporate Governance—The Board of Directors and
“Executive Officers” of Eagle’s proxy statement relating to its
2023 annual meeting of shareholders filed with the SEC on April 27,
2023. These documents will be available free of charge from the
sources indicated above.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures
as defined under SEC rules. These non-GAAP financial measures
include and reflect managements' current expectations and beliefs
regarding the potential benefits of the proposed transaction. Star
Bulk and Eagle believe that the presentation of these non-GAAP
measures provides information that is useful to Star Bulk's and
Eagle's shareholders. These non-GAAP measures should be considered
in addition to, not as a substitute for, or superior to other
measures of financial performance prepared in accordance with GAAP
as more fully discussed in Star Bulk's and Eagle's respective
financial statements and filings with the SEC. As used herein,
“GAAP” refers to accounting principles generally accepted in the
United States of America.
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 and Eagle have
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 proposed
transaction, including future financial and operating results and
synergies, Star Bulk’s, Eagle’s and the combined company’s plans,
objectives, expectations and intentions, and the expected timing of
the completion of the proposed transaction. 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: uncertainties as to
the timing of the proposed transaction; uncertainties as to the
approval of Eagle’s shareholders required in connection with the
proposed transaction; uncertainties as to the approval and
authorization by Eagle’s shareholders of the issuance of common
stock of Eagle in connection with Eagle’s convertible notes; the
possibility that a competing proposal will be made; the occurrence
of any event, change or other circumstance that could give rise to
the termination of the proposed transaction; the possibility that
the closing conditions to the proposed transaction may not be
satisfied or waived, including that a governmental entity may
prohibit, delay or refuse to grant a necessary regulatory approval;
the effects of disruption caused by the announcement of the
proposed transaction making it more difficult to maintain
relationships with employees, customers, vendors and other business
partners; risks related to the proposed transaction diverting
management’s attention from Star Bulk’s and Eagle’s ongoing
business operations; the possibility that the expected synergies
and value creation from the proposed 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 stockholder
litigation in connection with the proposed transaction may affect
the timing or occurrence of the proposed transaction or result in
significant costs of defense, indemnification and liability; 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 proposed
transaction; transaction costs; 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, 2022, “Part I. Item 1A.
Risk Factors” of Eagle’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2022, as updated by the risks described in
Part II. Item 1A. Risk Factors” of Eagle’s Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 2023, and Star Bulk’s
subsequent current reports on Form 6-K. You can obtain copies of
these documents free of charge from the sources indicated above.
Neither Star Bulk nor Eagle 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
Star Bulk
Investor Relations Simos Spyrou, Christos Begleris Co ‐ Chief
Financial OfficersStar Bulk Carriers Corp.c/o Star Bulk Management
Inc. 40 Ag. Konstantinou Av.Maroussi 15124Athens, GreeceEmail:
info@starbulk.comwww.starbulk.com
Financial Media:Nicolas BornozisPresidentCapital Link, Inc.230
Park Avenue, Suite 1536New York, NY 10169Tel. (212) 661‐7566E‐mail:
starbulk@capitallink.comwww.capitallink.com
Jim Golden / Tali Epstein / Jack KelleherCollected
StrategiesStarBulk-CS@collectedstrategies.com
Eagle
Constantine TsoutsoplidesChief Financial OfficerEagle Bulk
Shipping Inc.Tel. +1 203-276-8100Email: investor@eagleships.com
1 Based on the closing stock prices of Star Bulk and Eagle on
December 8, 2023.2 Combined liquidity, which is a non-GAAP
financial measure, is calculated by adding the amount of Star
Bulk's and Eagle's cash and cash equivalents and undrawn revolver
availability, in each case, as of September 30, 2023, as adjusted
for cash expenditures by Star Bulk in connection with its
repurchase of shares held by Oaktree, debt repayments, dividends,
draw downs under bridge facilities and proceeds from vessel sales
and equity raises, in each case, during the period between
September 30, 2023 and December 8, 2023, as applicable. 3 Combined
net leverage is calculated by dividing (a) the sum of Star Bulk's
and Eagle's net debt by (b) the sum of Star Bulk's and Eagle's
gross asset value. Net debt, which is a non-GAAP financial measure,
is calculated as debt less cash and cash equivalents, in each case,
as of September 30, 2023. Gross asset value, which is a non-GAAP
financial measure, is fleet valuation as per VesselValues on
October 29, 2023.
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