(July 15): Shares in Genting Singapore Ltd jumped as one of the city state’s two casino operators is said to be attracting takeover interest as tourists start coming back to the Asian travel hub.
US rival MGM Resorts International recently approached the firm’s controlling shareholder, the billionaire Lim family, to express its interest in a deal, people with knowledge of the matter said. While those discussions didn’t lead to an agreement, other potential suitors were also in the preliminary stages of studying Genting Singapore, said the people, who asked not to be identified because the information is private.
Shares in Genting Singapore rose as much as 7.3% in early trading, the most in nearly two years. The company has a market value of about S$9.6 billion (US$6.8 billion or about RM30.45 billion). Genting Bhd, the Malaysian conglomerate backed by the Lim family, owns 53% of the business, data compiled by Bloomberg showed.
Genting Singapore operates Resorts World Sentosa, a 49-hectare (490,000-square metre) destination located on an island off Singapore’s southern coast. It 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’s 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 could require regulatory approvals in the city state, the people said.
A spokesperson for MGM declined to comment, while representatives for Genting and its Singapore unit didn’t immediately respond to requests for comment outside regular business hours.
Genting’s chairman, Malaysian businessman Tan Sri 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 Ltd, a 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 Bhd, 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 US, it said.
MGM runs casinos in the US, Japan and Macau. It doesn’t have any gambling properties in Singapore, where the only two operators are Genting and Las Vegas Sands Corp, which runs the 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.