ATHENS - Star Bulk Carriers Corp. (NASDAQ:SBLK), a prominent dry bulk shipping company, has finalized its merger with Eagle Bulk Shipping (NYSE:EGLE) Inc., effectively expanding its fleet and operational scale. The merger, completed today, results in Eagle Bulk Shipping ceasing to trade on the New York Stock Exchange, with its shareholders receiving 2.6211 shares of Star Bulk for each share owned.
The completion of this merger marks a significant expansion for Star Bulk, which now boasts a fleet of 163 owned vessels and an aggregate capacity of 15.6 million deadweight tons (dwt). This includes a range of vessel sizes from Newcastlemax to Supramax, enhancing the company's ability to transport major and minor bulk cargoes such as iron ore, minerals, grain, bauxite, fertilizers, and steel products.
Petros Pappas, CEO of Star Bulk, expressed enthusiasm for the merger, stating it creates a global leader in dry bulk shipping and positions the company for growth and enhanced customer service. The merger is anticipated to provide Star Bulk with greater scale and a stronger financial profile.
In alignment with the merger, new appointments have been made to Star Bulk's Board of Directors and leadership team. Gary Weston joins the Board, Bo Westergaard is added to the leadership team, and Costa Tsoutsoplides will serve as interim Senior Advisor to support business integration.
Legal and financial advisors played a pivotal role in the merger process, with Cravath, Swaine & Moore LLP representing Star Bulk, Houlihan Lokey (NYSE:HLI) advising Eagle, and Akin Gump Strauss Hauer & Feld LLP and Hogan Lovells US LLP providing legal counsel to Eagle and its Board of Directors, respectively.
This strategic move is based on a press release statement.
InvestingPro Insights
In the wake of Star Bulk Carriers Corp.'s merger with Eagle Bulk Shipping, the company's financial and operational metrics provide a window into its current standing and future prospects. With a market capitalization of approximately $2.01 billion, Star Bulk presents a robust financial profile. The company's P/E ratio, a key indicator of its valuation, stands at 13.6, reflecting investor sentiment on its earnings potential. Moreover, its adjusted P/E ratio over the last twelve months as of Q4 2023 is 14.39, suggesting a stable valuation over the recent period.
InvestingPro Tips highlight that management has been proactively engaging in share buybacks, a sign of confidence in the company's value and future. Additionally, Star Bulk is expected to maintain profitability, with net income forecasted to grow this year. This is a crucial factor for investors considering the company's performance following the merger. Moreover, Star Bulk pays a significant dividend to shareholders, boasting a dividend yield of 7.55%, which is attractive for income-focused investors.
While analysts anticipate a sales decline in the current year, the company has demonstrated a strong return over the last three months, with a 17.91% price total return, and an impressive return over the last five years. Such performance metrics are indicative of the company's resilience and might appeal to long-term investors.
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