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Star Bulk Carriers unveils deal for Oceanbulk Shipping, Oceanbulk Carriers.

M2 EQUITYBITES-June 17, 2014-Star Bulk Carriers unveils deal for Oceanbulk Shipping, Oceanbulk Carriers

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17 June 2014 - Greek dry bulk shipper Star Bulk Carriers Corp (NASDAQ:SBLK) said it had agreed to acquire Marshall Islands-incorporated dry bulk carrier vessel operators Oceanbulk Shipping LLC and Oceanbulk Carriers LLC from affiliates of US Oaktree Capital Management LP and Petros Pappas and certain members of his family.

Petros Pappas is Star Bulk's non-executive chairman and the members of his family taking part in the transaction include Star Bulk director Milena Maria Pappas.

Star Bulk will issue 54.104m own common shares for the acquisition, which is valued at some USD653m based on Star Bulk's closing price of USD12.07 on 13 June.

Star Bulk said the combined company will have a market capitalisation of USD1.009bn, based on its closing price on 13 June.

Following completion, the target companies will become indirect fully-controlled units of Star Bulk. Oaktree will hold a 61.3% stake in Star Bulk and the Pappas group will own 12.5% of the buyer, with Petros Pappas taking the post of CEO at Star Bulk.

The deal is seen to be wrapped up within a 30-day period, pending Star Bulk's shareholders' clearance, which will be sought on 11 June. The transaction needs backing by a majority of Star Bulk's investors that are not affiliated with the vendors. Monarch Alternative Capital LP, representing 28.1% of such shareholders, has agreed to support the move.

The transaction, through which Star Bulk will acquire 15 dry bulk carrier vessels as well as contracts for the construction of 26 dry bulk vessels, is seen to establish the biggest US listed dry bulk company, boasting a fully delivered fleet of 69 vessels and significant commercial presence.

Seward & Kissel LLP, Evercore Partners Inc (NYSE:EVR) and Wachtell Lipton Rosen & Katz are advising Star Bulk on the move, while Oceanbulk is being consulted by Paul Weiss Rifkind Wharton & Garrison LLP and Monarch is relying on the guidance of Willkie Farr & Gallagher LLP.

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Publication:M2 EquityBites (EQB)
Date:Jun 17, 2014
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