This article first appeared in The Edge Malaysia Weekly on November 17, 2025 - November 23, 2025

When Genting Bhd (KL:GENTING) launched the takeover of Genting Malaysia Bhd (KL:GENM) a month ago, there was strong pushback from shareholders. They baulked at the proposal because the offer grossly undervalued GenM.

Genting offered RM2.35 per share for GenM. But the latter’s independent adviser’s valuation puts the fair value of GenM at between RM3.48 and RM3.77 per share.

The day after GenM released the independent adviser’s circular related to the privatisation exercise, its share price increased to a level that made the takeover price unattractive. Last Friday, the counter closed at RM2.37 per share, two sen higher than Genting’s offer price.

As in any other privatisation exercise, the offeror has not indicated if it will increase its offer. Assuming the situation does not change, Genting’s proposed privatisation will fail.

However, it will leave Genting with at least a 57.7% stake in GenM, higher than the 49.4% it held before the takeover was launched. And it does not mean that Genting has failed in its objective.

According to Genting, the overriding objective of the exercise is to make GenM its subsidiary by having equity interest of more than 50%. 

Genting has also stated that it currently has no contractual arrangement with GenM to exercise control over the latter’s overseas assets, unlike the situation with its flagship operation Resorts World Genting (RWG), where it has secured control via a management services agreement.

With a stake of more than 50%, Genting will have regulatory and accounting certainty over GenM’s overseas assets, similar to the arrangement with RWG. Genting will primarily gain control of the financial and operating policies of GenM’s overseas assets.

Genting has also said that increasing its stake in GenM will strengthen and better support its bid for a mega casino in New York.

Last week, GenM announced that the closing date for the takeover offer has been extended to Dec 1. Clearly, the minority shareholders of GenM are not going to accept the offer. They are probably waiting for the outcome of the New York casino bid, also on Dec 1, which is said to be positive for GenM should it be successful.

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