Genting Bhd fell short in its attempt to delist Genting Malaysia when unable to obtain the 75% of shares needed.
On Monday Malaysian conglomerate Genting Bhd failed to take control of leisure and hospitality arm Genting Malaysia (GENM). The parent needed 75% of GENM shares to privatise the unit and delist it from the Malaysia bourse.
The unsuccessful bid slot free credit was offset by news that a New York board has recommended that Genting’s application for a full casino licence at Resorts World New York City be approved. The licence is contingent on a complete review and approval by the New York State Gaming Commission, which will decide whether to award licenses to three recommended projects by 31 December.
Genting to invest $5.5B in NYC expansion
Genting launched the failed GENM takeover in anticipation of a big win in New York. The Queens slot parlour, open since 2011, was always a favourite to land one of three available Gotham casino licences. The company plans to invest $5.5 billion to turn the property into a full-scale integrated resort.
That means a major capital outlay. In a filing, Genting said control of GENM would give it “the financial strength and network to support the development of this significant project”. When complete, the upgraded casino is to feature up to 6,000 slot machines and 800 table games across a 500,000-square-foot gaming floor.
In October, Genting offered RM2.35 (US$.57) cash per share for the 50.64% of GENM shares it did not yet control. Although it managed to up its stake to 73.13% by Monday’s deadline, it fell short of the minimum.
Shareholders unimpressed by valuation
Analysts say the bid foundered on the offer, which was only 10% above the stock’s previously traded price.
“The offer was particularly unappealing for long-term shareholders, whose entry costs were often significantly higher than the bid price due to prolonged share-price underperformance,” Tradeview Capital portfolio manager Neoh Jia Man told the Business Times. “Many shareholders felt the proposal failed to adequately reflect GENM’s intrinsic value.”
Genting also runs Resorts World Genting near Kuala Lumpur, Resorts World Las Vegas and more than 30 provincial casinos in the UK. Genting Singapore operates Resorts World Sentosa, one of two integrated resorts, along with Marina Bay Sands, in that island republic.
In addition to Genting’s Resorts World New York City project, the New York Gaming Facility Location Board also recommended approval of a planned Hard Rock casino as part of the Metropolitan Park project at CitiField in Queens and development of a Bally’s property featuring a casino in the Bronx.