Eagle Bulk Shipping has won approval from its shareholders for a takeover by Star Bulk Carriers, creating a $2.7bn company titan in the bulker space.
The $836m all-stock takeover will create the world’s largest, publicly listed bulker owner with a fleet of 167 ships.
The merger is expected to be complete on Tuesday after the successful vote.
Ballots for 65% of Connecticut-based Eagle’s outstanding shares were cast in favour of the transaction, with all but 1% of the investor base participating in a special meeting.
“It’s official!” chief financial officer Costa Tsoutsoplides wrote on LinkedIn.
Once completed, the deal will see Petros Pappas-led Star issue about 2.62 shares for each unit of Eagle stock.
Shareholders were more unanimous on an Eagle proposal to issue new shares to cover the potential future conversion of the company’s bonds.
Some 96% of voters approved the ballot question, which focuses on a series of convertible senior notes that are due to mature later this year.
Share prices for both companies were on the rise on Friday after the announcement, with Eagle gaining 2.1% and Star edging up 1.6% in early morning trading that saw most New York-listed shipping stocks on the rise.
Eagle will bring a fleet of 52 ultramaxes and supramaxes to Star’s more diversified bulker fleet, which has 17 newcastlemaxes, 20 capesizes, seven post-panamaxes, 40 kamsarmaxes, two standard panamaxes, 19 ultramaxes and eight supramaxes, in addition to eight newbuildings.
The Connecticut company’s $394m in revenue in 2023 adds to the $949m booked by Star last year.
Eagle chief executive Gary Vogel, who took the helm from the original chief executive, Sophocles Zoullas, in 2015, is to leave the Stamford company upon the closing of the merger.
The companies have said that “certain” other Eagle executives will stay on, and one member of its board will become a Star director.
The two companies both emerged out of New York’s 2005 rush of IPOs in shipping, and both boast integrated in-house ship management platforms.
Star chief operating officer Nicos Rescos said in a February conference call that the two companies have been working toward a seamless integration of the two platforms, should shareholders approve the deal this month.
The completion of the transaction will lead to inevitable questions about what Star will do next.
Deutsche Bank analyst Amit Mehrotra asked in February whether there was a point at which the Athens-based company could be too big to manage.
“First of all, let’s get the Eagle deal done first before worrying about what to do next,” Star president Hamish Norton said at the time.
“There is a little bit of not wanting to bite off more than we can chew. And we do need to integrate Eagle properly and make sure we keep the best of both companies before we start looking for follow-on deals.”
But he said there is no specific level at which Star is too big. He said it would remain small compared to an airline or large container line even after the Eagle deal.
“I think Nicos Rescos may have something to say about our ability to manage a fleet of two or four times the size but, you know, if a container line or an airline can do it, I think we can do it,” he said.
