Malaysia-based conglomerate Genting Bhd announced on Monday that it has put forward a conditional voluntary takeover offer for its subsidiary Genting Malaysia Bhd.
Depending on the outcome of the operation, Genting aims to move to delist Genting Malaysia from Bursa Malaysia, where both companies are currently listed, the parent said in a filing.
Genting aims to acquire all the remaining ordinary shares in Genting Malaysia – excluding treasury shares – that it does not already hold, for a cash offer price of MYR2.35 (US$0.55) per share.
The offer price represents a premium of 9.8 percent over the last traded price of MYR2.14 on Friday, before trading in the stock was suspended pending the announcement.
The current takeover offer – being handled by AmInvestment Bank Bhd – is for a total of 2,870,039,874 ordinary shares, representing a 50.64-percent equity interest in Genting Malaysia.
It involves a total cash consideration of MYR6.74 billion (US$1.59 billion), to be “fully satisfied via a combination of debt financing of up to approximately RM6.3 billion and internally generated funds,” Genting said.
Genting Malaysia operates a number of casinos around the world. The firm’s flagship property is Resorts World Genting, Malaysia’s sole licensed casino. The company also runs gaming operations in the United Kingdom, Egypt, the United States, and the Bahamas.
Genting Malaysia reported second-quarter revenue of nearly MYR2.92 billion in August, up 9.3 percent year-on-year. That brought first-half revenue to MYR5.51 billion, a 1.5-percent increase from a year earlier.
According to its Monday filing, Genting said the takeover would also enhance Genting Malaysia’s financial profile as the latter is in the run for one of three full-scale downstate New York casino licences that are likely to be awarded by the end of 2025.
Genting Malaysia is proposing – via a US$5.5-billion bid – to extend and upgrade its existing Resorts World New York City slot-machine and electronic gaming facility in Queens.
“Genting Malaysia is one of the four remaining contenders for up to three downstate New York gaming licences,” the parent noted in its Monday filing.
It added: “If the bid is successful, significant capital investment is required to implement the above mentioned proposal. In this regard, Genting believes that with control over Genting Malaysia clearly established through its majority ownership of Genting Malaysia shares, the overall financial profile of Genting Malaysia will be further enhanced as Genting will be better placed to lend the Genting group’s financial strength and network to support the development of this significant project.”
