A plan to consolidate shipping through in acquisition of Greek dry bulk shipping company DryShips has the firm’s shares spiking 35% in pre-market trading this morning.
For a while now, a deal has been in the works for SPII Holdings to acquire the business, where DryShips would be merged into a subsidiary of SPII.
The two firms already have similar leadership – DryShips chairman and CEO George Economou will also runs SPII holdings and according to news June 14, formed a special committee to look at the acquisition.
“Greece-based dry bulk shipping company DryShips Inc said announced it has received a non-binding offer letter from SPII Holdings, which proposes a transaction pursuant to which the Company would be merged into a subsidiary of SPII Holdings,” wrote Laxman Pai at MarineLink.
Now, breaking news shows SPII has agreed to purchase remaining shares of DRYS at a price above $5.00.
“The purchase price is 37% above Friday’s closing price of $3.83 and implies a market capitalization of $456.2 million,” writes Tomi Kilgore at MarketWatch.
Formed in 2004, DryShips has a number of vessels including a crude oil carrier and tankers.
It also has a history of repeated reverse stock splits in which the company lost quite a bit of investor activity.
The current price of over five dollars brings the stock to six-month highs and puts it in the running with values in late 2018, notwithstanding a spike to $6.75 in January of this year.
Since then, the stock had lost over half of its value before climbing back up to around $4.30 July 9.
We’ll see if the deal has the power to reverse DRYS’s fortunes.
