Eagle Bulk jumps on takeover deal by Star Bulk

Star Bulk Carriers

12/12/2023 14:44

** Shares of shipping firm Eagle Bulk  EGLE.K  climb 7.12%
to $49.48 after agreeing to a takeover by rival Star Bulk
Shipping  SBLK.N  
    ** As per the last close of both stocks, deal terms imply
value of ~$52.30 for each Eagle Bulk share, coming to a premium
of 13.2% as per Reuters' calculations and bringing deal value to
about $522.42 mln
    ** SBLK would own ~71% of combined co and EGLE shareholders
would own ~29% 
    ** "While the cost synergies will help, and likely continue
to drive one of the lowest opex per day in the peer group,
revenue synergies are a little harder to quantify ... merger
lightly increases financial leverage, although only marginally,"
brokerage Stifel says in a note 
    ** "However, with the remainder of the smaller dry bulk
players trading at a significant discount to NAV (Net asset
value), the pressure is likely on to consolidate further," says
Stifel 
    ** Brokerage Jefferies says deal makes sense for both
parties, "deal is expected to yield $50 million in cost
synergies, primarily as EGLE's fleet transitions onto SBLK's low
operating cost platform"

    

 (Reporting by Kabir Dweit)
 ((Kabir.Dweit@thomsonreuters.com))