The conglomerate says the deal would improve capital allocation and operational efficiency
[KUALA LUMPUR] Genting Bhd has unveiled plans to buy out the minority shareholders of its subsidiary Genting Malaysia (GENM) in a RM6.7 billion (S$2.1 billion) deal that would lead to the gaming and hospitality arm’s delisting from Bursa Malaysia.
In a filing to the stock exchange on Monday (Oct 13), Genting said it has launched a conditional voluntary takeover offer at RM2.35 a share, representing a premium of almost 10 per cent to GENM’s last-traded price of RM2.14 on Friday, before trading on its stock was suspended.
Trading in both Genting and GENM shares were halted on Monday, pending the announcement. Genting last closed at RM2.86.
Given that Genting already holds more than 49 per cent of GENM, the company believes the acceptance condition of more than 50 per cent can be achieved with the offer price.
“The offer is in line with Genting’s objective of securing statutory control of GENM,” said Genting in a statement.
Genting said achieving majority ownership would enable it to streamline capital allocation and better support large-scale investments.
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To fund the acquisition, the conglomerate said it will use a combination of RM6.3 billion in debt financing and internally generated funds.
The buyout comes as GENM intensifies efforts to secure a coveted casino licence in New York, where it is proposing a US$5.5 billion (RM23.2 billion) integrated resort in Queens under its US arm, Resorts World New York City.
Strategic rationale
At RM2.35 per share, the offer values GENM at multiples of 9.1 times EV/Ebitda, 53 times earnings, and 1.12 times book value based on its audited 2024 results.
Genting added that the offer also provides shareholders a premium exit opportunity of 9.81 per cent to 22.9 per cent above GENM’s 12-month market prices.
Genting’s shares have slumped 26 per cent in the year to date; GENM’s have declined 5.3 per cent, according to data from LSEG, amid weaker earnings and rising cost pressures.
GENM, incorporated in 1980 and listed since 1989, is one of the world’s largest leisure and hospitality companies. Its flagship Resorts World Genting in Malaysia has more than 10,500 hotel rooms and multiple theme parks, attracting millions of visitors annually.
The group also operates casinos and resorts in New York, the Catskills, and Hudson Valley, as well as in Birmingham in the UK, the Bahamas, and Egypt. In Malaysia, it owns seaside properties in Kijal and Langkawi.
For the financial year ended December 2024, GENM posted a net profit of RM251.2 million and net assets of RM11.9 billion.
In the first half of the financial year ended Jun 30, 2025, GENM registered a net profit of RM489.3 million, from RM140 million the year before. Revenue went up slightly, from RM5.4 billion to RM5.5 billion.
In contrast, its parent company Genting recorded a sharp decline in profitability; its net profit fell by 70 per cent to RM248.12 million from RM828.52 million in H1 2024.
Analysts: Paving the way for broader restructuring
Analysts say the move to privatise GENM could pave the way for a broader restructuring within the Genting group, particularly if it secures the New York licence.
Tradeview Capital portfolio manager Neoh Jia Man said the potential privatisation may be designed to facilitate internal reorganisation, including a possible spin-off of GENM’s assets into a real estate investment trust structure to unlock value.
He noted that Genting’s shareholders could benefit from the potential award of the new gaming licence in New York state, where GENM remains among the four shortlisted contenders.
Neoh told The Business Times: “For minority shareholders, the offer provides an immediate exit at a reasonable premium to current market prices.”
He added that while the RM2.35 a share offer appears fair based on trailing price-to-earnings and EV/Ebitda multiples, the roughly 10 per cent premium to GENM’s last-traded price may leave some investors underwhelmed.
“That said, there remains room for a potential upward revision to the offer,” he said.
Another analyst, who requested anonymity, said the buyout is likely a prelude to more significant corporate manoeuvres in the coming months.
“Taking GENM private would give management greater agility to make strategic decisions, particularly if the New York project materialises, which would demand substantial capital investment,” this analyst said.
The deal draws comparisons with the 2007 privatisation of Maxis Communications, then Malaysia’s largest mobile operator, by billionaire T. Ananda Krishnan.
His RM17.4 billion buyout through Binariang GSM was followed by Saudi Telecom Company’s US$3 billion investment for a 25 per cent stake, which enabled Maxis to expand aggressively in India and Indonesia.
“Many minority shareholders at the time felt sidelined,” recalled the analyst. “Once the promoters secured more than half the equity, there was little that the minorities could do to stop the process. Genting’s offer could evoke similar sentiments,” he added.
Investor reaction
GENM’s stock has largely failed to regain its pre-pandemic highs, hampered by pandemic-related losses and concerns over related-party transactions. This was particularly after the company absorbed Empire Resorts, a loss-making US casino previously controlled by the Lim family, the founders of the Genting group.
Both Genting and GENM were removed from the FBM KLCI benchmark index earlier this year, reflecting their diminished weighting in Malaysia’s equity market.
Retail investors have historically shown strong interest in Genting-linked counters, given the group’s near-monopoly in the casino sector. GENM’s shares traded above RM3 before Covid-19 struck in early 2020, but have since struggled to recover.
A retail investor said: “I hope they could offer a better price as I bought it at above RM3. At this offer, I’ll be taking a loss of around RM2,000.”
