Genting Bhd’s ongoing takeover attempt for its subsidiary, Genting Malaysia Bhd, has come under further scrutiny, with an independent adviser labelling the
Genting Bhd’s ongoing takeover attempt for its subsidiary, Genting Malaysia Bhd, has come under further scrutiny, with an independent adviser labelling the bid a significant undervaluation.
In a circular issued on Thursday, Kenanga Investment Bank Bhd stated that the MYR2.35 (US$0.57) per-share offer is “not fair and not reasonable.” The bank’s sum-of-parts valuation estimates Genting Malaysia’s true value is between MYR3.48 and MYR3.77 per share. The offer therefore represents a substantial discount of between 32.47% and 37.67%.
Kenanga also noted the offer is at a discount of 3.69% to 19.52% compared to Genting Malaysia’s one- and two-year high market prices. The non-interested directors of Genting Malaysia supported Kenanga’s view and recommended that minority shareholders reject the offer.
As of 1 p.m. Malaysia time on Friday, Genting Malaysia shares were trading at MYR2.38, slightly above the offer price, suggesting that the market agrees with the adviser’s assessment.
Genting Bhd launched the takeover as a voluntary offer in mid-October, at which time it held 49.36% of Genting Malaysia. Through ongoing open-market purchases, the parent company has increased its stake to 57.0% as of Thursday.
This move pushed its ownership above the 50% threshold, causing the offer to become unconditional. It also triggered a mandatory takeover under Bursa Malaysia rules.
The ultimate objective for Genting Bhd is to delist Genting Malaysia. To achieve this, it must secure 75% of shares for statutory control or 94.94% for a compulsory acquisition. With its current holding, Genting Bhd still needs to convince a significant number of minority shareholders to sell. The closing date for acceptances has been extended from 24 November to 1 December.
A major reason behind the takeover bid is Genting Malaysia’s strong position to win one of three full-scale commercial casino licences in downstate New York. The licences are expected to be awarded by the end of 2025.
Genting Malaysia operates Resorts World New York City (RWNYC), a highly successful slots and electronic gaming facility in Queens. A full licence would permit the introduction of live table games, a move that would dramatically boost long-term earnings.
Analysts at Maybank Investment Bank earlier stated that RWNYC is “virtually assured” of winning a licence due to its readiness, scale, and existing fiscal contribution. Maybank suggested RWNYC could generate US$2.7 billion in gross gaming revenue by 2031, capturing 42% of the projected market. The bank estimates this upgrade could lift Genting Malaysia’s net profit to MYR1.93 billion (US$455 million) by 2030, reinforcing the view that the current offer undervalues these growth prospects.
In addition to its US ambitions, Genting Malaysia is a core strategic asset within the wider Genting group. It operates the flagship Resorts World Genting, the only licensed casino in Malaysia. The company also runs gaming operations in the United Kingdom, Egypt, and the Bahamas.
Analysts believe delisting the company would enable Genting Bhd to have greater financial flexibility, simpler governance, and streamlined decision-making as it manages this global casino portfolio.
Kenanga’s “not fair and not reasonable” recommendation confirms what analysts and the market are signalling: this is an opportunistic bid by Genting Bhd. The parent company is attempting to buy out minority shareholders at a significant discount, just before its subsidiary, Genting Malaysia, potentially wins a transformative New York casino licence.
The fact that the stock is trading above the offer price shows investors are either betting on a higher, revised offer or are simply rejecting the current bid outright.
Genting Bhd is playing a long game. By crossing the 50% threshold, it made the offer mandatory and secured its control. However, it is still far from the 75% needed to delist the company and fully consolidate its assets. This is a classic corporate squeeze play. The parent company wants to capture 100% of the massive future earnings from RWNYC. The independent adviser is simply telling minority shareholders not to give away that future value so cheaply.
