Genting’s GenM takeover bid becomes mandatory as stake crosses 2% limit

PETALING JAYA: Genting Bhd has triggered a mandatory take-over offer (MO) for Genting Malaysia Bhd (GenM) after breaching the 2% acquisition threshold within a prescribed six-month period, converting its earlier unconditional voluntary offer into a mandatory one under prevailing takeover rules.

In a statement, Genting said it acquired a further 34.93 million GenM shares from the open market.

This brings the total shares acquired by Genting and its persons acting in concert (PACs) during the six-month period beginning May 13, 2025, to 114.47 million shares, or 2.02% of GenM’s issued shares (excluding treasury shares).

Genting noted that all acquisitions were made at prices not exceeding the offer price of RM2.35 per GenM share.

As at May 13, Genting and its PACs collectively held 2.80 billion GenM shares, representing 49.44% of the company.

As their stake was above 33% but below 50%, the take-over rules require a mandatory offer to be triggered once additional acquisitions exceed 2% within six months.

“In view of the above, the present unconditional voluntary take-over offer has become an unconditional MO yesterday, in accordance with note 14 of paragraph 4.01 of the Rules,” it said.

On behalf of the offeror, AmInvestment Bank said the acceptance deadline has been extended from 5pm on Nov 24, 2025 to 5pm on Dec 1, 2025.

Other than the offer becoming an unconditional MO and the extended closing date, all other terms and conditions of the offer as set out in the offer document remain unchanged.

Meanwhile, Kenanga Investment Bank Bhd (Kenanga IB), the independent adviser for Genting Malaysia Bhd (GenM), has recommended shareholders to reject Genting Bhd’s RM2.35 a share offer to take the company private.

In a circular on Bursa Malaysia, Kenanga IB said its recommendation is based on the view that the offer of RM2.35 per share is “not fair” as the offer price represents a discount of between 32.47% to 37.67% to the estimated value of GenM shares of between RM3.48 and RM3.77 per GenM share derived from using the SOPV method.

Kenanga IB added that the offer price also reflects a 19.52% discount to the one-year and two-year high market price of GenM shares up to Oct 10, 2025, being the last day on which GenM shares were traded prior to the notice of the offer dated Oct 13, 2025.

Kenanga IB is also of the view that the offer price was “not reasonable”, because GenM’s shares remain relatively liquid when compared against the FBM KLCI index.

The independent adviser added the average monthly trading liquidity of GenM shares of about 7.10% is higher than the average trading liquidity of the FBM KLCI index for the past 24 months from October 2023 up to September 2025 of about 6.48%.

It pointed out that while Genting does not intend to maintain the listing status of GenM, the company may still remain listed and tradeable as long as it continues to meet the 25% public shareholding spread and Genting’s stake in GenM stays below the 90% threshold required for a compulsory delisting.

Kenanga IB said the group’s long-term commitment to the regional gaming market is reinforced by its ongoing operations in the United States, where the group has submitted a bid and is finalising a proposal that will enhance the capital structure of Empire Resorts, Inc.

GenM’s non-interested directors, save for non-executive chairman Tan Sri Mohd Zahidi Zainuddin, concurred with Kenanga IB’s opinion that the offer is “not fair” and “not reasonable”.

Mohd Zahidi is also an indirect major shareholder of Kenanga IB.

Last month, Genting announced its plans to buy out and delist GenM in a deal worth RM6.7bil. The offer to minority shareholders is equivalent to RM2.35 per share.

Genting said the privatisation deal will mostly be satisfied through debt financing of up to RM6.3bil, while the rest will be settled through internally generated funds.

The offer is expected to allow Genting to gain statutory control of GenM, to cement Genting’s position as the holding company of GenM and to become its majority shareholder.

Genting also rationalises the exercise as a move that would strengthen its financial position and flexibility, allowing it to support GenM’s expansion plans, including its US$5.5bil bid to develop a new integrated resort in New York through its subsidiary, Genting New York LLC.

Earlier this month, Genting’s bid to take Genting Malaysia Bhd (GenM) private turned unconditional after it crossed the 50% shareholding threshold.

In a filing with Bursa Malaysia then, Genting said it owns 50.105% of GenM’s total issued shares.