Genting Malaysia Bhd’s independent advisor has recommended that shareholders reject Genting Bhd’s MYR2.35-per-share ($0.50) offer to privatize the casino operator, stating the bid is ‘not fair’ and ‘not reasonable’.
The assessment was issued by Kenanga Investment Bank Bhd (Kenanga IB) in a circular filed with Bursa Malaysia on Thursday.
Kenanga IB said the MYR2.35 offer price—equivalent to about $0.50—sits well below Genting Malaysia’s estimated valuation range of MYR3.48 to MYR3.77 per share ($0.74 to $0.80), representing a discount of between 32.47 percent and 37.67 percent. The advisor added that the offer also marks a 3.69 percent to 19.52 percent discount to the group’s one- and two-year high market prices. Given these disparities, Kenanga IB said the offer does not adequately reflect the company’s underlying asset value or market performance.
The advisor further noted that Genting Malaysia shares remain relatively liquid, citing a two-year average monthly trading volume of 219.21 million shares, or 8.08 percent of free float—above the FBM KLCI’s two-year average of 7.1 percent. With this level of liquidity, investors are likely able to exit through the open market should the takeover bid fail to reach the 90-percent threshold required for delisting.
Kenanga IB also described the offer as ‘not reasonable’, referencing Genting Malaysia’s growth prospects in the United States, including its bid for one of three downstate New York full casino licenses and the ongoing restructuring of Empire Resorts. These factors, it said, present potential upside that the current offer does not capture.
As of November 13th, Genting Bhd held 57 percent of Genting Malaysia. To breach the public spread requirement, the parent must acquire an additional 18 percent; to delist the company, it needs a further 33 percent. The offer was initially issued on October 13th, when Genting Bhd owned 49.36 percent of the subsidiary. The first closing date—previously set for November 24th—has since been extended to December 1st.
Genting Bhd launched its voluntary takeover in mid-October, valuing the proposed buyout at approximately $1.59 billion and targeting full ownership of Genting Malaysia with the intention to remove the company from Bursa Malaysia. The offer became unconditional earlier in October after the parent’s stake surpassed 50 percent. Since then, Genting Bhd has accumulated nearly 114.5 million shares from open-market purchases.
Genting Malaysia’s non-interested directors concurred with Kenanga IB’s assessment, with the exception of non-executive chairman Tan Sri Mohd Zahidi Zainuddin, who is also an indirect major shareholder of Kenanga IB and abstained from deliberations.
Genting Malaysia operates casino and leisure properties in Malaysia, the United Kingdom, Egypt, the United States, and the Bahamas. Its flagship property, Resorts World Genting, remains Malaysia’s only licensed casino.
The parent company has argued that full ownership would strengthen Genting Malaysia’s financial position as it competes for a New York casino license and pursues plans to upgrade and expand Resorts World New York City in Queens.
