Genting Bhd edges closer to 75% stake in Genting Malaysia

Genting Bhd still has a potential path to privatising Genting Malaysia.

Malaysia.- Genting Bhd has resumed buying shares in its subsidiary, Genting Malaysia, on the open market following its unsuccessful mandatory takeover offer. It held only 73.13 per cent of shares by the December 1 deadline, but Genting Malaysia reported in a filing yesterday that its parent company’s stake has risen to 73.798 per cent.

Malaysian listing rules restrict companies from acquiring over 2 per cent of a listed company within a year of a lapsed offer, but Genting Bhd still has a path to privatising Genting Malaysia as it now only needs a 1.87 per cent stake increase. 

Nevertheless, analysts from investment bank Nomura have pointed out that the road to delisting is complex. Genting Bhd would still need to convene a shareholder meeting and offer fair terms to minority shareholders even after reaching the 75 per cent threshold. Even then, there’s no assurance of success if more than 10 per cent of shareholders object. 

Genting Bhd’s initial takeover offer of MYR2.35 per share had been labeled unfair and inadequate by some analysts, including Genting Malaysia’s independent advisor who urged existing shareholders to reject the offer. Considering the unit’s recent recommendation by New York’s Gaming Facility Location Board (GFLB) to be awarded a full commercial casino license for its Resorts World New York City property, Nomura believes a price of MYR2.70 is a better offer.

The analysts stated: “We think that the previous offer price at MYR2.35 did not capture any upside from the New York license, and the remaining holders should be ideally offered a higher exit offer in case a delisting is attempted.”

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See also: Genting fails in bid to delist Genting Malaysia

Genting Bhd still has a potential path to privatising Genting Malaysia. Malaysia.- Genting Bhd has resumed buying shares in its subsidiary, Genting Malaysia, on the open market following its unsuccessful…