Genting Bhd has been slowly but steadily increasing its shareholding in subsidiary Genting Malaysia in recent weeks, with on-market purchases having as of Friday seen its interest grow to 73.838%.
The purchases follow closure of the group’s mandatory takeover offer in early December, when its stake in Genting Malaysia sat at 73.13%, and are significant because it would be able to move to privatize the subsidiary should its holding hit 75%.
Genting Malaysia owns and operates Malaysia’s Resorts World Genting, oversees its casino operations in the UK including Resorts World Birmingham and also holds the groups US interests, including Empire Resorts. Most significantly it owns Resorts World New York City, which was recently granted a full commercial casino license allowing it to add table games and convert the property to an integrated resort-style offering.
As previously reported by IAG, Malaysian listing rules prevent companies from purchasing any more than 2% of another listed company in the 12 months following a lapsed offer, although Genting Bhd needed to acquire only 1.87% more following closure of its offer to reach 75% ownership.
Investment bank Nomura explained in a recent note 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. There is also no guarantee this would be successful because if minority shareholders are not satisfied, the delisting bid can be defeated should more than 10% of shareholders object.
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% – a level that fell well short during the takeover offer period.
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