Genting Bhd’s bid to assume full control of Genting Malaysia has lapsed, with the company now holding a controlling 73.13% stake in its subsidiary.
The company ultimately opted not to further extend the offer period for shares under its mandatory takeover bid, nor to increase its initial offer price of MYR2.35 per share.
The final 73.13% ownership level achieved during the offer period fell slightly short of the 75% required for Genting Bhd to pursue delisting of Genting Malaysia from the Malaysian bourse, although it may be possible for the company to acquire the remaining 1.87% on the open market over the coming year. Ironically, companies are not permitted to purchase any more than 2% of a listed company in the 12 months following a lapsed offer.
Investment bank Nomura noted that, should Genting achieve its 75% target, it would have to convene a shareholder meeting and make a reasonable cash or alternative offer to the remaining holders. However, if minority shareholders are not satisfied, a delisting bid can be defeated should more than 10% of shareholders object.
“This exit offer and the delisting application will also be evaluated by an independent advisor,” Nomura analysts stated. “Overall, we think that Genting Malaysia’s minority holders should wait for a better price as it will likely be difficult to get enough votes to delist without a better exit offer, especially as Genting Malaysia is now one of the selected winners of the New York casino license, which was not reflected in the previous MYR2.35 per share offer price, in our view.”
Genting Bhd revealed in October that it plans to delist Genting Malaysia either by gaining statutory control, effective at 75% ownership, or compulsory acquisition should ownership reach 94.94%.
The company’s bid for greater control is linked to Genting Malaysia’s ownership of Resorts World New York City, which won a full commercial casino license overnight.
Aside from the New York casino and Resorts World Catskills parent Empire Resorts, Genting Malaysia also controls the group’s Malaysia flagship Resorts World Genting.
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