On Monday, Malaysian conglomerate Genting Bhd failed in its attempt to take full control of its leisure and hospitality subsidiary, Genting Malaysia (GENM). The company needed to secure 75% of GENM’s shares to privatise the unit and remove it from the Malaysian stock exchange, but it fell short of the required threshold.
The setback was balanced by positive news from the United States. A New York review board has recommended approval of Genting’s bid for a full casino licence for Resorts World New York City. The licence is still subject to a final review by the New York State Gaming Commission, which is expected to decide by 31 December whether to grant licences to the three recommended applicants.
Genting to invest $5.5B in NYC expansion
Genting launched its unsuccessful bid to take over GENM while preparing for a major opportunity in New York. Resorts World New York City, its long-running Queens slot parlour that opened in 2011, has long been considered a strong contender for one of the three downstate casino licences. Genting has proposed a US$5.5 billion investment to upgrade the venue into a full integrated resort.
Such an expansion requires significant capital. In its filings, Genting said full control of GENM would have provided the “financial strength and network” needed to support the large-scale New York project. Once completed, the enhanced casino is expected to include up to 6,000 slot machines and 800 table games spread across a 500,000-square-foot gaming floor.
In October, Genting offered RM2.35 (US$0.57) per share in cash for the remaining 50.64% of GENM that it did not already own. Although the company managed to increase its stake to 73.13% by Monday’s deadline, it still fell short of the 75% required for the privatisation to move forward.
Shareholders unimpressed by valuation
Analysts believe the takeover attempt faltered largely because the offer price—only 10% above GENM’s prior trading level—failed to entice investors.
Tradeview Capital portfolio manager Neoh Jia Man told the Business Times that the bid was “especially unattractive to long-term shareholders, many of whom entered at higher prices due to the stock’s prolonged underperformance.” He added that holders felt the proposal did not properly reflect GENM’s true value.
Genting Malaysia operates several major properties, including Resorts World Genting near Kuala Lumpur, Resorts World Las Vegas, Resorts World Sentosa in Singapore, and more than 30 regional casinos across the UK.
Alongside Genting’s bid for a full casino licence at Resorts World New York City, the New York Gaming Facility Location Board has also recommended moving forward with two additional projects: a Hard Rock casino within the Metropolitan Park development at Citi Field in Queens, and a Bally’s casino planned for the Bronx.
