Genting, founded by the billionaire Lim family, plans to make a conditional cash offer worth RM6.74 billion (US$1.6 billion) for all remaining shares in Genting Malaysia as it seeks to consolidate control of its casino and hospitality business.
The move, announced on Monday, comes as Genting seeks statutory control to strengthen its financial position ahead of a potential $5.5 billion casino project in New York, where its U.S. unit is bidding for a downstate gaming license.
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Signage of Genting Malaysia’s Resorts World displayed at its complex of casino, hotel and entertainment park in Genting Highlands, Pahang, Malaysia Sep. 16, 2022. Photo by Reuters |
Genting said majority ownership would allow it to better support large-scale investments and streamline capital allocation.
The conglomerate, which already holds about 49.4% of Genting Malaysia, offered RM2.35 per share, a 9.8% premium to Genting Malaysia’s last price of RM2.14 before both stocks were suspended on Monday.
The offer is conditional on Genting securing more than 50% of Genting Malaysia’s shares and will be funded through up to 6.3 billion ringgit in debt financing and internal cash, according to the filing.
Genting said it does not intend to maintain Genting Malaysia’s listing if public shareholding falls below regulatory thresholds and may seek a delisting or compulsory acquisition if it reaches 90%.
The offer price represents premiums of up to 22.9% over Genting Malaysia’s six-month average price, and implies valuation multiples of 9.1 times EV/EBITDA, 53 times earnings, and 1.12 times book value, based on 2024 audited figures.
Genting shares have fallen about 26% year-to-date, while Genting Malaysia is down 5.3%, LSEG data showed, pressured by weak earnings and cost pressures.
Genting Malaysia posted a profit of RM251.2 million in 2024 and owns Resorts World Genting in Malaysia, as well as casinos in the U.S, UK, Bahamas and Egypt.
The offer is expected to complete by the end of 2025, subject to the Securities Commission Malaysia’s approval.
