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Genting Bhd is inching closer to the threshold that would allow it to move on a potential privatization of Genting Malaysia, after steadily adding to its stake on the open market in recent weeks. As of Friday, its shareholding in the subsidiary has risen to 73.838%, up from 73.13% when its mandatory takeover offer closed in early December. The latest increase reflects a series of on-market purchases, made after the offer period ended, that have quietly nudged Genting Bhd nearer to the critical 75% level.
The timing is significant because crossing that 75% mark would give Genting Bhd the statutory control it has previously said it is aiming for. During the takeover process, the group had outlined its intention to delist Genting Malaysia either by reaching this statutory control point or, in a more ambitious scenario, by moving to compulsory acquisition if it could lift its ownership to 94.94%. That higher target was not achieved during the offer period, but the follow-up buying shows the parent is still working toward at least the first objective.
Strategic Importance of Genting Malaysia’s Assets
Genting Malaysia sits at the center of the group’s global gaming and leisure operations. The company owns and runs Resorts World Genting in Malaysia, one of the group’s flagship properties. It also oversees casino operations in the UK, including Resorts World Birmingham, and holds Genting’s US interests through Empire Resorts. However, the standout asset in this portfolio is Resorts World New York City, which just received a full license for a commercial casino. This license allows for table games and could evolve into a full integrated resort, which could have significant benefits for future earnings.
Given this asset base, tighter control over Genting Malaysia gives Genting Bhd more direct influence over some of its most important properties and expansion projects. Malaysian listing rules, however, have imposed a temporary cap: companies cannot buy more than 2% of another listed company’s shares in the 12 months after a lapsed offer. Even so, Genting Bhd only needed an additional 1.87% after the offer closed to hit the 75% mark, leaving room for the gradual accumulation now being reported.
Pathway to Possible Privatization
Investment bank Nomura has previously outlined what would happen if Genting Bhd manages to push its stake in Genting Malaysia to 75%. At that point, the parent would be required to call a shareholder meeting and put forward a reasonable cash or alternative offer for the remaining minority investors. This process could be a precursor to delisting, but it is not a guarantee. The bid to delist could be thwarted by opposition from over 10% of shareholders.
In October, Genting Bhd had already made clear that it wanted to take Genting Malaysia off the public market, stating that it planned to pursue a delisting either by hitting the 75% ownership level that gives it statutory control or by reaching 94.94% and using compulsory acquisition powers. The latter scenario did not materialize during the takeover offer, which closed with the parent holding 73.13%, but the recent buying activity indicates the first route remains very much in play.
What the Rising Stake Signals for Shareholders
With its holding now at 73.838%, Genting Bhd is within touching distance of the 75% threshold it has been targeting. The incremental purchases since December suggest a deliberate, measured approach to increasing its exposure to Genting Malaysia, while staying within the constraints of local listing rules. For minority shareholders, the parent’s progress raises the prospect that a fresh proposal could eventually be put on the table if and when the 75% mark is reached.
Any such move would trigger the formal process described by Nomura: a shareholder meeting and an offer that remaining investors would have to evaluate on its merits. It should be noted that whether delisting happens or not depends on how this segment responds, especially considering that opposition from over 10% could derail this effort entirely. The important thing to note currently is that Genting Bhd is gradually increasing its stake in NYX, which could bring it to a situation where delisting could be considered in the future.
Source: Inside Asian Gaming (IAG)
