Shares of Eagle Bulk Shipping have surged following the announcement of an all-stock transaction with Star Bulk Carriers. The agreement has resulted in a 10% increase in Eagle Bulk Shipping shares, valued at $50.97.
Despite hitting a 52-week low of $39.15 on September 21, Eagle Bulk Shipping shares have remained steady over the past year.
Under the terms of the deal, Eagle shareholders will receive 2.62 shares of Star Bulk stock for each share held. Once the transaction is completed, Star Bulk shareholders will hold approximately 71% of the combined company, with Eagle retaining the remaining 29%.
The combined company will be headed by Petros Pappas, the current CEO of Star Bulk, who will assume the role of CEO. Spyros Capralos, the chairman of Star Bulk, will serve as chairman of the combined company. Additionally, one member from the Eagle board will join the Star Bulk board.
The acquisition is expected to be finalized in the first half of next year.
Following this news, B. Riley Securities has downgraded Eagle Bulk to a Neutral rating from Buy, and reduced their price target from $72 to $52.20 per share. Similarly, Noble Capital Markets has lowered their rating to Market Perform from Outperform, setting a price target of $52 per share.