KUALA LUMPUR (July 26): Genting Malaysia Bhd (GenM) shares 5.99% in active trade this morning after the firm settled its dispute with Fox Entertainment Group Llc, Twentieth Century Fox Film Corp, FoxNext Llc, Twenty First Century Fox Inc (21st Century Fox) and Walt Disney Co (Disney) over the construction of an outdoor theme park (OTP).
At 9.05am, GenM rose 22 sen to RM3.89 with 12.08 million shares traded.
It said all parties in the dispute have agreed to fully resolve their disputes and dismiss all claims between one another, pending legal action in the US District Court for the California Central District.
The parties signed a restated Memorandum of Agreement yesterday which granted GenM a license to use certain Fox intellectual properties.
Recall that in November 2018, GenM had sued 21st Century Fox and its owner Walt Disney Co for pulling out of the outdoor theme park in Resorts World Genting.
Genting Bhd has a 47.08% stake in Genting Malaysia.
Meanwhile, Hong Leong IB Research maintained its “Buy” rating GenM at RM3.67 with a higher target price (TP) of RM4.21 (from RM3.53) and said the dispute between Fox-Disney and GenM is fully resolved.
In a note today, the research house said the OTP will proceed with partly Fox and non-Fox IP.
“We believe excitement will return as this will still be the first theme park in Asia with Fox’s IP, and is likely to increase footprint.
“For now we keep our forecast unchanged pending clearer indication on OTP’s opening timeline. This may act as a good catalyst for foreign shareholders to return, as foreign shareholding on GenM is at an alltime low of circa 31%.
“Maintain Buy, with higher TP of RM4.21, as we increase our EV/EBITDA multiple to 9.0x (1SD above 3 years mean). Post upgrading GenM, our TP on Genting Bhd would increase to RM7.05, maintain Hold,” it said.