Genting Berhad has announced plans to acquire the remaining 50.64% of Genting Malaysia for RM67b, equating to RM2.35 per share. The acquisition aims to secure a clear majority control, enabling Genting Berhad to better support Genting Malaysia’s bid for a New York casino licence. The purchase will be primarily funded by RM63b of new debt.
The move is significant as it positions Genting Berhad to potentially increase its influence and operational capabilities within the gaming sector. Should Genting Malaysia secure the New York casino licence, Genting Berhad’s leverage is expected to rise considerably due to the proposed $5.5b (RM23b) investment required for the project.
Shareholders of Genting Singapore could see indirect benefits if Genting Berhad decides to seek higher-than-expected dividends from Genting Singapore to assist in servicing the group’s debt. This strategic financial manoeuvre could impact the company’s overall financial health and shareholder returns.
DBS has maintained a “Hold” rating for Genting Singapore, with a target price of S$0.80, reflecting the potential indirect benefits and financial implications of the acquisition. The development underscores Genting Berhad’s strategic efforts to expand its footprint in the lucrative casino market, particularly in the US.
The acquisition and its implications will be closely watched by investors and industry analysts, as it could reshape the competitive landscape in the global gaming industry.
