New York-listed dry bulk owner Grindrod Shipping may be the latest public owner to be considering “strategic alternatives” following the announced retirement of chief executive Martyn Wade last week. Sources in the dry trade tell TradeWinds that Grindrod does not appear to be seeking a permanent successor to Wade after having appointed chief financial officer Stephen Griffiths as interim CEO on 1 April. That talk and a sharp-but-brief surge in Grindrod’s shares following the Wade announcement fueled suspicions that a sale or merger may be in the Singapore owner’s future. Grindrod has been approached for comment.

While the subject has come into focus following the Wade announcement, it is believed that Grindrod has been quietly exploring a possible sale or combination for several months, market sources said. That process is now expected to become more public. One logical place to look would be London-listed Taylor Maritime Investments which has built its stake in Grindrod up to 26.6%. But Taylor likely would face competition for Grindrod, which operates a core fleet of 15 handysize and 16 supramax-ultramax bulkers. “I suppose they have technically been in play since Taylor took a strategic stake in the company,” said an executive of one competing dry bulk owner.

However, the two owners are of similar size — with TMI’s current market capitalization near $472m and Grindrod’s $444m — and there are questions about whether TMI has the financial firepower to pull off a winning bid if an auction develops for the owner. “The two companies are just about the same size. Grindrod might effectively be acquiring Taylor,” said a second company executive. TMI has a fleet of 28, with all but two in the handysize sector. Hong Kong-listed Pacific Basin and New York-listed Genco Shipping & Trading and Eagle Bulk Shipping are among the listed owners who could consider Grindrod to be a good fit and are larger with Pacific Basin at $2.7bn, Genco at $930m and Eagle at $860m, noted one company executive.

Grindrod closed trading in New York on Tuesday at $24.02 a share. Upon word of Wade’s retirement, the stock surged on 1 April from a previous close of $25.44 to $26.32, a gain of 3.5% on a day when other dry stocks fell. The share surged to a 52-week high of $28.47 on Monday, further fanning M&A rumors. But it has since fallen off again amid a general retreat by dry shares. Still, any acquisition bid will have to consider that Grindrod is trading well below its net asset value, which was pegged at $30 per share in a February note from Noble Capital Markets analyst Poe Fratt.

TMI, a closed-end investment fund listed on the London Stock Exchange, in September bought 4.33m Grindrod shares, a 22.4% stake, from holder Remgro Ltd of South Africa, adding to its previous stake of just over 2%. The $77.9m splash worked out about $18 per share. Grindrod was still trading at that level as of 3 January but has appreciated by about one-third year to date in a buoyant dry market.