Genting’s Pursuit of Full Ownership in Genting Malaysia Through Strategic Takeover Bid
Genting’s Plan for Complete Ownership of Genting Malaysia
Genting Bhd, a major Malaysian conglomerate, has announced its intention to acquire the remaining 50.64% stake in its publicly traded subsidiary, Genting Malaysia Bhd. The proposed acquisition is valued at MYR 6.74 billion (approximately $1.6 billion). This strategic move is aimed at unifying control over the company’s casino and hospitality ventures.
Voluntary Takeover Offer to Support Global Expansion
On Monday, Genting Group declared a voluntary takeover offer to purchase all outstanding shares of Genting Malaysia not currently owned by the company. The offer stands at MYR 2.35 (about $0.56) per share, which is a 9.8% premium over the last trading price prior to the stock’s temporary halt. To finance this acquisition, Genting plans to utilize a combination of MYR 6.3 billion in loans and internal cash reserves.
The company’s official filing to Bursa Malaysia highlighted that this deal is intended to provide greater financial agility. This flexibility is critical for backing major projects like the $5.5 billion casino planned in New York City by its American subsidiary, Genting New York LLC. By securing full ownership, Genting aims to streamline financial resources across its global operations and bolster its capacity to support significant undertakings.
Genting also indicated that if the public free float falls below a regulatory threshold, it might initiate the process to delist Genting Malaysia from the stock exchange. Additionally, the company may pursue a compulsory acquisition if its ownership surpasses 90%.
Market Reaction and Diverging Analyst Opinions on the Takeover Bid
The announcement triggered a positive market reaction, with Genting’s share price surging by nearly 7%—the most significant increase in over three years.
Nevertheless, analyst opinions are mixed regarding the valuation and implications of the takeover. Maybank Investment Bank, as reported by industry sources, views the offer as undervaluing Genting Malaysia, citing the potential untapped value of its Miami property and prospects linked to the New York casino license. Similarly, TA Securities advised shareholders against accepting the deal, warning that privatization could complicate future fundraising efforts.
Conversely, CGS International and Hong Leong Investment Bank have recommended accepting the offer, highlighting the attractive premium and current market dynamics as persuasive factors for investors to exit.
Public Investment Bank took a more neutral stance, upgrading its recommendation for Genting Malaysia shares to “buy” in light of the potential privatization while maintaining a “neutral” rating for Genting Bhd itself. Genting Malaysia operates the Resorts World Genting in Pahang and oversees additional casino assets in the US, UK, the Bahamas, and Egypt. Pending approval from the Securities Commission Malaysia, the buyout is expected to conclude by the end of 2025.
