Genting Berhad’s US$1.6bn bid to privatise Genting Malaysia sparks optimism and concerns

Analysts highlight long-term value potential but warn of increased leverage and challenges in securing shareholder approval for delisting.

Malaysia.- Genting Berhad, the Malaysian conglomerate led by billionaire Lim Kok Thay, has launched a MYR6.74bn (US$1.59bn) conditional voluntary takeover offer to acquire the remaining 50.64 per cent of Genting Malaysia Berhad, aiming to delist the leisure and hospitality subsidiary from Bursa Malaysia. The offer, priced at MYR2.35 (US$0.55) per share, represents a 9.8 per cent premium over Genting Malaysia’s last traded price of MYR2.14 (US$0.50), sparking a rise in share prices but raising concerns about debt and shareholder acceptance.

Genting Berhad plans to raise MYR6.3bn (US$1.4bn) through new debt at a 5.2 per cent interest rate, supplemented by internal funds. Maybank Investment Bank suggests the privatisation could unlock significant long-term value, citing potential catalysts such as the revaluation of Genting Malaysia’s land in Miami, the possible sale of Empire Resorts’ non-gaming assets in New York, and the prospect of securing a downstate New York casino licence.

Analyst Samuel Yin Shao Yang said the move could boost Genting’s earnings by up to 51 per cent, and Maybank raised its target price for Genting to MYR3.94, maintaining a “Buy” recommendation. Public Investment Bank upgraded Genting Malaysia to “Buy,” while Hong Leong Investment Bank advised shareholders to accept the offer, noting its 14.1 per cent premium over its previous MYR2.06 target price.

However, CreditSights flagged the move as credit negative for Genting Berhad, projecting net leverage to rise from 2.9x to 3.8–3.9x, increasing refinancing risks for its US$1.5bn bond due in January 2027. The firm doubts Genting will secure the 75 per cent shareholder approval needed for delisting, citing the modest premium and Genting Malaysia’s underperformance since 2021. Analysts suggested Genting may need to raise the offer price by the November 28 deadline to attract investors holding losses. 

For Genting Malaysia, the deal is seen as modestly credit positive. However, delisting could raise governance concerns due to Genting Malaysia’s history of related-party transactions, such as the Empire Resorts acquisition. The bid aligns with Lim Kok Thay’s vision to streamline the group’s portfolio, following a leadership transition in February 2025.

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Analysts highlight long-term value potential but warn of increased leverage and challenges in securing shareholder approval for delisting. Malaysia.- Genting Berhad, the Malaysian conglomerate led by billionaire Lim Kok Thay,…