Genting Singapore draws takeover interest from MGM Resorts

The casino operator is attracting takeover interest as tourists start coming back to Singapore. PHOTO: LIANHE ZAOBAO

NEW YORK (BLOOMBERG) - Casino operator Genting Singapore is attracting takeover interest as tourists start coming back to the Asian travel hub, people with knowledge of the matter said.

US rival MGM Resorts International recently approached the firm's controlling shareholder, the billionaire Lim family, to express its interest in a deal, the people said.

While those discussions did not lead to an agreement, other potential suitors have also been in the preliminary stages of studying Genting Singapore, said the people, who asked not to be identified because the information is private.

Shares of the Singapore-listed company jumped on Friday morning (July 15), leading the Singapore Exchange to issue a query to the company on the "unusual price movements". The stock rose as much as 9.3 per cent in the morning, the most in nearly two years, before the company called for a trading halt at 1pm.

The shares ended the morning at 80.5 cents, up 7.3 per cent, with 112.24 million shares exchanging hands, making it the session's most heavily traded counter.

Genting Singapore has a market value of about $9.8 billion. Genting Berhad, the Malaysian conglomerate backed by the Lim family, owns 53 per cent of the business, data compiled by Bloomberg shows.

Genting Singapore's Resorts World Sentosa features more than 550 gaming tables and over 2,400 slot machines and other electronic games, according to its website. Other attractions include the Universal Studios Singapore theme park as well as an aquarium, water park, restaurants and shops.

There is no certainty the deliberations will lead to a transaction, and MGM could also resume its pursuit of the company, the people said. Any deal for Genting Singapore would require regulatory approvals in the city-state, they added.

A spokesman for MGM declined to comment, while representatives for Genting Berhad and its Singapore unit did not immediately respond to requests for comment outside regular business hours.

Covid-19 hit

Genting's chairman, Malaysian businessman Lim Kok Thay, oversees a range of businesses that were hit hard by the coronavirus pandemic including theme parks, hotels and restaurants. Genting Hong Kong, the cruise operator he controls, filed to wind up the company earlier this year after struggling to pay its debt.

The family's flagship company, Genting Berhad, said in May its net loss narrowed in the first quarter and predicted that international tourism will continue its gradual recovery. The conglomerate aims to ramp up operations at its Malaysian resort following the relaxation of Covid-19 restrictions and will work to reinforce its position as the leading gaming operator in the north-eastern United States, it said.

Genting Singapore's most recent quarterly results "showed that the recovery was in full swing", said Tellimer analyst Nirgunan Tiruchelvam. The takeover interest is not surprising, he added.

"Singapore is opening up, and Western gaming companies are looking for emerging-market exposure," he said.

MGM runs casinos in the US, Japan and Macau. It does not have any gambling properties in Singapore, where the only two operators are Genting and Las Vegas Sands, which runs Marina Bay Sands, known for its iconic design and rooftop infinity pool.

Singapore has been seeking to compete with Macau, where casinos have recently been temporarily shut by the government to contain a Covid-19 outbreak.

• With additional information from The Straits Times

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