Independent advisors urge Genting Malaysia to reject Genting Bhd’s takeover offer

Kenanga Investment Bank maintains that the proposal is “not fair and not reasonable”.

Malaysia.- Independent adviser Kenanga Investment Bank has reiterated its recommendation for minority shareholders to reject Genting Berhad’s MYR2.35 (US$0.57) per-share offer for full control of Genting Malaysia. In a circular released yesterday, the bank said the offer is “not fair and not reasonable,” noting that it represents a discount of between 32.47 per cent and 37.67 per cent to the company’s intrinsic value based on a sum-of-parts valuation of MYR3.48 to MYR3.77 per share.

The conclusion aligns with concerns raised by multiple analysts who argue that the holding company is attempting to privatise one of its most valuable subsidiaries at a price that fails to reflect its current performance or strategic prospects. As of Friday at 1pm Malaysia time, Genting Malaysia shares were trading at MYR2.38, above the price of the takeover offer.

The bid became unconditional in October after Genting Berhad lifted its stake above 50 per cent. By Thursday afternoon, the parent company had increased its shareholding to 57 per cent, securing more than 320.8 million shares through acceptances and an additional 114.5 million on the open market. The deadline for shareholders to accept the offer has been extended from November 24 to December 1.

Kenanga’s recommendation was supported by Genting Malaysia’s non-interested directors, who also advised shareholders to reject the offer. Nomura analyst Tushar Mohata noted that while Genting Berhad may continue to build its stake, it is unlikely to reach the 75 per cent threshold necessary to initiate a delisting or the 95 per cent needed to pursue a compulsory minority squeeze-out unless it raises the offer price.

The move was partly driven by Genting Malaysia’s bid for one of three full-scale commercial casino licences in downstate New York, expected to be awarded by late 2025. The company operates Resorts World New York City (RWNYC) in Queens and has proposed a multibillion-dollar expansion that would allow table games.

Analysts at Maybank Investment Bank consider RWNYC “virtually assured” of securing a licence. It projects the property could generate US$2.7bn in gross gaming revenue by 2031, capturing about 42 per cent of the downstate market. Maybank estimates the upgrade could lift Genting Malaysia’s net profit to MYR1.93bn (US$455m) by 2030, growth not reflected in Genting Bhd’s MYR2.35 offer.

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See also: Genting Berhad surpasses 50% ownership threshold of Genting Malaysia

Kenanga Investment Bank maintains that the proposal is “not fair and not reasonable”. Malaysia.- Independent adviser Kenanga Investment Bank has reiterated its recommendation for minority shareholders to reject Genting Berhad’s…