Genting Bid for Malaysian Unit Privatization – $2.1 Billion
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Genting’s RM6.74 Billion Bid to Take Private Genting Malaysia
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Kuala Lumpur – On October 13, 2023, Genting Berhad announced a conditional cash offer to acquire the remaining shares of Genting Malaysia Berhad it dose not currently own, valuing the deal at RM6.74 billion (approximately S$2.1 billion). This move is strategically aimed at bolstering Genting’s financial standing as it pursues a potential $5.5 billion casino project in New York.
The Offer Details
Genting, which already controls approximately 49.4% of Genting Malaysia, proposed an offer price of RM2.35 per share. This represents a 9.8% premium over Genting Malaysia’s last traded price of RM2.14 before trading was suspended on October 13, 2023, pending the announcement as reported by The Star.
The offer is contingent upon Genting securing more than 50% of genting Malaysia’s shares. Funding for the acquisition will come from internal resources adn perhaps debt financing, according to Business Times.
Strategic Rationale: New York Casino Bid
The primary driver behind this consolidation is Genting’s ambition to secure a downstate gaming license in New York.Genting Americas, the US unit of Genting Berhad, is competing for one of the available licenses to build a large-scale casino resort. Reuters reports that the estimated cost of the New York project is $5.5 billion (approximately S$7.1 billion).
Genting believes that full ownership of Genting Malaysia will provide greater financial flexibility to support such a ample investment. The company stated that majority ownership will allow for better capital allocation and streamline decision-making processes, as detailed in their official announcement.
Genting Malaysia’s Performance & Background
Genting Malaysia operates casinos, hotels, and leisure resorts, primarily in Malaysia, but also with operations in the United States, the united Kingdom, and the Bahamas. The company’s flagship property is Resorts World Genting in Malaysia. Prior to the trading suspension, Genting Malaysia’s market capitalization was approximately RM18.6 billion (approximately S$5.7 billion).
| Metric | Value (as of Oct 12, 2023) |
|---|---|
| Share Price | RM 2.14 |
| Market Capitalization | RM 18.6 billion |
| Genting Berhad |