Genting Berhad’s proposed MYR6.74 billion ($1.6 billion) plan to acquire full ownership of its subsidiary Genting Malaysia Berhad could significantly enhance its long-term value if successful, according to a new report by Maybank Investment Bank.
The Malaysian conglomerate on Monday launched a conditional voluntary takeover offer (VTO) to acquire the 2.87 billion shares (50.64 percent) of Genting Malaysia that it does not already own, offering MYR2.35 ($0.49) per share in cash, the company said in a filing to Bursa Malaysia on October 13th. Genting currently holds a 49.36 percent stake in the leisure and hospitality arm.
If the offer receives sufficient shareholder acceptance, Genting intends to delist Genting Malaysia from Bursa Malaysia. The VTO will cost MYR6.7 billion ($1.58 billion), largely financed through MYR6.3 billion ($1.48 billion) in new debt at a 5.2 percent interest rate, alongside internal funds.
According to Maybank’s analysis, the transaction initially appears unfavorable for Genting, as it values Genting Malaysia at 26x and 25x price-to-earnings ratios for FY2025E and FY2026E, compared with Genting’s own 13x and 9x multiples. The higher gearing—expected to rise from 43 percent to 50 percent—and additional interest costs are projected to offset incremental earnings from consolidation, resulting in minimal short-term earnings accretion.
However, Maybank notes substantial long-term upside if Genting succeeds in privatizing Genting Malaysia and gains direct exposure to its key growth catalysts. These include the potential revaluation of its Miami land, acquired in 2011 for $442 million (MYR2.0 billion) but valued by the market at $1.2 billion (MYR5.4 billion); the possible sale of Empire Resorts’ non-gaming assets in New York; and the prospect of securing a downstate commercial casino license in the United States.
‘If Genting successfully privatizes Genting Malaysia and these catalysts accrue directly to the parent, earnings could rise by up to 51 percent, and its sum-of-the-parts fair value could increase to MYR4.25 ($0.89) per share,’ Maybank Investment Bank analyst Samuel Yin Shao Yang wrote in the note.
Maybank raised its target price for Genting to MYR3.94 ($0.82), up 6 percent from MYR3.70 ($0.77), while maintaining a ‘Buy’ recommendation. The bank highlighted that Genting’s “blue sky” scenario—factoring in asset revaluation, a potential US casino license win, and asset divestment—could further enhance shareholder returns.
Genting Malaysia operates Resorts World Genting in Malaysia and holds stakes in Resorts World New York City and Resorts World Bimini in the Bahamas. Genting Berhad also owns significant interests in Genting Singapore, Genting Plantations, and Resorts World Las Vegas, making it one of Asia’s largest integrated leisure and entertainment groups.
