Genting Bhd’s Unsuccessful Bid to Privatise Genting Malaysia (GENM)

Genting Bhd’s attempt to privatise Genting Malaysia (GENM) ended unsuccessfully, reaching 73.13% acceptances, short of the 75% threshold required for delisting. The offer expired on Dec 1, coinciding with positive news that GENM’s US subsidiary secured a full-casino licence in New York—a development that analysts say highlights GENM’s undervalued future prospects.

Why the Privatisation Failed

• The offer price—about 10% above GENM’s pre-offer trading price—was widely viewed as unattractive, especially by long-term investors whose entry costs were higher.

• Analysts argued the bid underestimated GENM’s future value, particularly given:

  • The new New York casino licence

  • Overseas expansion prospects

  • Potential asset revaluations

  • Possible non-gaming divestments

• GENM’s fragmented minority shareholder base made a higher acceptance rate harder to achieve.

• Under Malaysian takeover rules, Genting cannot acquire more than 2% of GENM shares for 12 months without a waiver, making another quick privatisation attempt unlikely.

New York Casino Licence: A Major Catalyst

The New York Gaming Facility Location Board approved all three full-casino licences, including Genting New York’s RWNYC, making it:

• Expected to be New York City’s only full-service casino for 3–4 years

• A strong revenue driver due to the advantage of live table gaming (9–12× more revenue than VLTs)

RWNYC plans include:

• Expansion from 400 to 2,000 hotel rooms

• 11–15 million expected annual visitors

• Up to 800 gaming tables and 6,000 slot machines by 2029

Market Reaction

Despite the positive licence news:

• GENM’s share price fell 4% to RM2.25

• Genting Bhd slipped 2% to RM3.29

Analysts, however, maintain optimism:

• GENM trades below its historical price-to-book ratio

• Kenanga maintains a RM3 target price and “outperform” call

• Asset restructuring is seen as a future catalyst

Funding and Expansion Outlook

The New York project will cost US$4–5 billion, though the funding gap has narrowed to US$1–2 billion thanks to:

• Improved earnings outlook from being NYC’s sole full-service casino

• Potential monetisation of Miami land (previously valued near US$1.2 billion)

• Possible sale of 270 million treasury shares

• Ability to issue up to 10% new shares without triggering a rights issue

Big Picture

Although the privatisation attempt failed, analysts see significant long-term upside for GENM. The company benefits from strengthened overseas prospects—especially in New York—and maintains regulatory transparency as a publicly listed entity, which many minority investors prefer.

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