There may be growing jeopardy in Genting Bhd’s efforts to acquire Genting Malaysia, following advice issued by Kenanga Investment Bank – the independent adviser appointed to assess the offer.
Although Genting Bhd has now raised its stake to 57%, leading to an unconditional mandatory takeover offer, the independent adviser’s findings cast significant doubt over the likelihood of the deal progressing to a full acquisition.
Kenanga Investment Bank urged minority shareholders to reject the offer, stating that the MYR 2.35 per share proposal is “not fair” and “not reasonable”. The bank argued that shareholders would be better served by exploring the open market.
According to the adviser, Genting Malaysia’s fair value lies between MYR 3.48 and MYR 3.77 per share — meaning the MYR 2.35 offer undervalues the company by between 32.47% and 37.67%.
Fuelling the pursuit for Genting Bhd is the ability to elevate the firm’s bid for New York expansion, as it looks to streamline capital.
The takeover was touted to be completed by the start of December, aligning with the developments of the New York licensing process. However, it remains to be seen whether the latest update will cause a spanner in the works of this roadmap.
Genting already boasts a strong footprint in New York, through its Resorts World brand, which is the largest slots-only venue in the state. Expansion through a new license in the state would enable Resorts World to offer the full casino experience, including table games.
The group has a VLT Parlour based in Queens, which is located within the Aqueduct Racetrack. Given this presence, the firm is widely backed to achieve success in its bid for expansion and a full casino license in the state.
Currently, it operates over 5,800 video terminals, with the proposed expansion set to be worth around $5.5bn.
