The Pennsylvania-based law office of Brodsky & Smith has launced an investigation into potential claims against the Board of Directors of the dry bulk specialist Baltic Trading Limited for possible breaches of fiduciary duty and other violations of state law in connection with the sale of the company to Genco Shipping & Trading Limited.
Under the terms of the transaction, Baltic shareholders will receive only 0.216 of a share of Genco common stock for each share of Baltic stock they own.
The investigation concerns whether the Board of Baltic breached their fiduciary duties to shareholders by failing to adequately shop the company before agreeing to enter into this transaction, and whether Genco is underpaying for Baltic.
The transaction may both undervalue Baltic and would result in a loss for many Baltic shareholders, says Brodsky & Smith.
For example, Baltic previously traded at USD 6.86 per share May 27, 2014 and an analyst has set a USD 4.00 per share price target for Baltic.
Genco and Baltic signed the stock-for-stock merger agreement on April 8, creating a dry bulk shipping company with a fleet of 70 vessels and an aggregate carrying capacity of approximately 5,159,000 dwt.
Following the customary closing conditions and approvals, the transaction is expected to close in the third quarter of 2015.