Diana Shipping said it will launch a proxy fight to replace six directors at rival Genco Shipping and Trading after its takeover bid was rejected, reports Reuters.

The company, which owns nearly 15 per cent of Genco, had offered US$20.60 per share in cash for all outstanding stock. Diana said it will nominate executives with shipping industry experience in the coming days.

Genco stated its nominating and corporate governance committee will review the proposed nominees under standard procedures, stressing it will act in shareholders' best interests.

Diana said it wants to give Genco shareholders the chance to elect new directors willing to consider alternatives, including its acquisition proposal. Genco rejected the offer made on November 24, which represented a 15 per cent premium to its closing price on November 21.

Diana criticised Genco's six-week delay in responding and maintained that combining the two companies would benefit shareholders and consolidate the dry bulk sector. Genco countered that the bid undervalued the company after a thorough review with external advisers.

During due diligence, Genco suggested instead that it acquire Diana, saying this would benefit both sets of shareholders. Genco's shares fell 1.16 per cent, but have risen 38 per cent over the past year.