DryShips' stock skyrocketed by more than a third minutes after the company announced going private but then plateaued throughout the day, just shy of the latest offer price.
The New York-listed diversified owner this morning announced that its billionaire chief executive will spend almost $76m in taking DryShips into private ownership, $18m more than was mooted previously, according to a newly approved takeover plan.
In the hours since then, its 86.9 million outstanding shares stayed 35% up to $5.18 each.
DryShips’ board of directors approved the merger with privately held, Economou-owned SPII Holdings after a special committee formed in July recommended the proposal.
The offer has come in priced higher than previously circulated, sending DryShips' valuation to about $456m.
DryShips has been known historically as a bulker owner, but has acquired a fleet of six tankers over the past two years.
It bought out Connecticut-based tanker pool operator Heidmar in mid-June.
Better offer
SPII will acquire the 14.5 million DryShips shares it does not already own for $5.25 each in cash, without interest, a filing said on Monday.
This is 31% more than SPII's initial offer of $4.00 per share, which would have seen the company paying $57.9m in total.
Prior to commencing the offer, SPII owned 72.4m shares or 83.35% of DryShips.
Following the announcement of the higher offer, DryShips' share price jumped 35% to $5.16 on the Nasdaq as soon as markets opened in New York this morning.
The stock closed on Friday at $3.82 per share.
Special committee
The merger is expected to close in the fourth quarter and is subject to approval by DryShips' shareholders at an upcoming special meeting, plus other customary closing conditions.
Evercore has been retained as financial advisor to the DryShips special committee, which is comprised of George Kokkodis, Andreas Argyropoulos and George Demathas, all of whom are independent directors of the company. Kokkodis is the committee's chairman.
Fried, Frank, Harris, Shriver & Jacobson has been retained as the special committee's legal advisor.
Law firm Seward & Kissel is serving as legal counsel to the DryShips, while Orrick, Herrington & Sutcliffe are lawyers for SPII.
