Genting Wants Full Control of Genting Malaysia in Recent Takeover Bid

Malaysian conglomerate Genting Bhd has revealed its plan to buy the remaining 50.64% stake in its listed subsidiary Genting Malaysia Bhd for MYR 6.74 billion ($1.6 billion). This move aims to consolidate control over its casino and hospitality operations before making potential big investments in the United States.

Genting Suggests MYR 6.3 Billion-Backed Takeover to Boost Global Growth

Genting Group announced a voluntary takeover offer on Monday. It wants to buy all remaining Genting Malaysia shares that they do not already own. The deal offers MYR 2.35 ($0.56) in cash for each share. This price is 9.8% higher than the last trading value before the stock stopped trading. To pay for this purchase, the company plans to use MYR 6.3 billion ($1.5 billion) in loans and its own cash reserves.

Based on Genting‘s report to Bursa Malaysia, the company aims to gain more financial flexibility through this deal. This will help them support a $5.5 billion casino project in New York City, which their American branch, Genting New York LLC, plans to build. The group stressed that full ownership would let them use their money across their global businesses and provide stronger support for big projects.

Genting warned that if public ownership drops below the required level, it might take the company off the stock market. They also mentioned the possibility of a forced buyout if their ownership goes above 90%.

Genting Shares Soar While Analysts Clash Over MYR 6.74B Bid

The market responded to the announcement. Genting’s stock price rose by almost 7% on Tuesday, its biggest jump in more than three years. 

However, experts disagree on the offer’s worth and its future effects. Maybank Investment Bank thinks the bid undervalues Genting Malaysia, reported The Edge Malaysia. They point to hidden value in its Miami land and possible gains from a New York casino license. TA Securities agrees, telling shareholders to turn down the deal. They argue that going private could make it harder to raise money later on.

On the other hand, CGS International and Hong Leong Investment Bank told investors to take the offer, saying it gives them a good chance to get out, given the current market situation and the premium above their target prices.

Public Investment Bank did not take sides. They upgraded Genting Malaysia to “buy” because of the chance it might go private, but kept their “neutral” rating on Genting Bhd.Genting Malaysia runs Resorts World Genting in Pahang and has more casinos in the US, UK, the Bahamas, and Egypt. The buyout, if the Securities Commission Malaysia approves it, should wrap up by the end of 2025.