Genting Bhd's full acquisition plan for its subsidiary Genting Malaysia did not go as planned. After nearly two months of effort, the parent company only managed to increase its shareholding to 73.13%, failing to reach the critical threshold of 75% required to initiate delisting, leaving this acquisition worth approximately $1.59 billion temporarily shelved.
Acquisition Hindered: Offer Rejected by Independent Advisors
The acquisition attempt began in mid-October, with Genting Group initially intending to buy the remaining 50.64% of Genting Malaysia shares it did not own at a price of 2.35 Malaysian Ringgit per share, aiming for full control and potential privatization. In plain terms, the parent company wanted to "fully acquire" the subsidiary. Despite extending the deadline from November 24 to December 1 and continuously buying shares from the market, the final shareholding was stuck at 73.13%, not even touching the three-quarters threshold.
A significant obstacle came from the assessment of independent advisors, who explicitly stated that the offer price of 2.35 Ringgit per share was "unfair and unreasonable," advising minority shareholders to reject the offer. This undoubtedly added a huge barrier to the acquisition.
New York Casino Becomes a Key Variable
Another deep-seated reason for the acquisition's difficulties may relate to significant developments in Genting Malaysia's U.S. operations. Its subsidiary "Resorts World New York City" recently received a casino operation recommendation from the New York Gaming Facility Location Board, awaiting the final license issuance. The company had submitted a $5.5 billion expansion plan in June, intending to upgrade it to a comprehensive resort.
Analysts pointed out that the initial acquisition offer price did not fully reflect the enormous potential value brought by the New York casino license. Investment bank analysts estimate that the New York project alone could bring Genting Malaysia up to 1.93 billion Ringgit in net profit by 2030. This "big cake" clearly influenced minority shareholders' judgment on the acquisition price, making them feel "selling early is not worthwhile."
Market Reaction and Future Outlook
After the transaction results were announced, the market reacted quickly. On December 2, Genting Group's stock price fell by 2.1%, and Genting Malaysia's stock price dropped by 4.3%. For the future, Genting Group's strategy seems to turn to "maintaining the status quo." Analysts believe that since the parent company did not immediately act to increase its shareholding to above 73%, it might be satisfied with the current level of shareholding and not seek further acquisitions in the short term.
According to Malaysian regulations, Genting Group has two paths to continue pushing for privatization: one is to reach a 75% shareholding and initiate a mandatory delisting process; the other is to reach an astonishing 94.94% shareholding and initiate a mandatory acquisition. Currently, both paths still need time.
(For more information on global gaming enterprise capital operations and market dynamics, visit the PASA official website for professional analysis.)
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