Genting expands gaming interest with Macau buy - Tuesday 12th of April 2005

THE Genting group, which is on a mission to expand its gaming business beyond Malaysia into Singapore and elsewhere, is said to have bought a stake in a casino in thriving Macau.
Reuters, citing unidentified sources, reported yesterday that the group’s founder and main shareholder — Tan Sri Lim Goh Tong and his family — paid US$102.6 million (US$1 = RM3.80) for a 6.9 per cent stake in Hong Kong’s K. Wah Construction Materials Ltd, which is buying the Galaxy Casino in Macau.

The deal was part of a US$150 million share sale by K. Wah to fund the US$2.36 billion Galaxy purchase, it said.

K. Wah is to re-name itself Galaxy Entertainment Group and will be the first Macau casino to be listed on an exchange.

Genting officials, when contacted by Business Times, declined to comment.

Genting Bhd’s share price rose sharply to a six-week high in reaction to the news, on its strongest volume yet this year.

It moved up 5.5 per cent (RM1) to an intra-day high of RM20.20 before coming off to close just 3.3 per cent (60 sen) higher to RM18.80. Volume more than doubled to 3.7 million shares.

Analysts said the development, if true, was a step in the right direction for Genting, which needs to expand beyond its traditional domestic market to remain competitive.

Galaxy holds one of three casino licences in Macau, which is one of the world’s biggest gaming hubs.

Gaming revenue in Macau, the only place in China where gambling is legal, reportedly rose 44 per cent to US$5 billion last year, and is still booming.

With competition also to come from Singapore come 2009, Genting needs to do something to protect its gaming interests.

“Genting needs to grow elsewhere because of limited opportunities in Malaysia,? said Vincent Khoo, Hwang-DBS Vickers’ research head.

Sitting on a cash pile of RM2.2 billion as at the end of last year, Genting has more than sufficient resources to make such acquisitions.

It has bid, together with Universal Studio’s theme park unit, for the right to a casino licence in Singapore, and just a few days ago, it increased its stake in the UK’s largest casino operator, Stanley Leisure plc, to 19.1 per cent,

“They’re now playing their version of roulette — placing bets around the region and waiting to see which one pays off,? observed a fund manager who helps manage some RM1.5 billion.

Macquarie Research Equities said these are exciting times for Genting.

“This is a growth stock, with multiple growth opportunities in the UK and Singapore,? it said in a research note to clients.

The majority of stockbroking houses are positive on Genting’s shares, their target prices ranging between RM20.50 and RM25 apiece.

Other news from around the same time

Casino Owner Rolling The Dice On New Properties - Tuesday 12th of April 2005

Over the last couple of years, Boyd Gaming Group made two huge bets that eventually put it at the s....


MGM Mirage Invited to Submit Proposal for Singapore Casino - Tuesday 12th of April 2005

MGM Mirage today announced that it, along with CapitaLand, has been invited by the Singapore governm....


Some Fear Ohio Legalized Gambling - Tuesday 12th of April 2005

Even without the glitz of real casinos, legal gambling is almost everywhere. Gamblers can bet on hor....


Illinois Lottery Launches $150 Million Summer Promotion - Tuesday 12th of April 2005

Illinois Lottery Launches $150 Million Summer Promotion ....


SunCruz to fold Hollywood gambling-ship operations - Tuesday 12th of April 2005

Gambling ship operator SunCruz Casinos will shut down its Hollywood operations and lay off 90 worker....


IT firms have solutions for casino industry - Tuesday 12th of April 2005

Apart from niche technology players that cater specifically to the global casino industry, conventio....


Casinos tax plan to fund Festival - Tuesday 12th of April 2005

A TAX on hotels and casinos in the Capital has been proposed as a funding solution for the cash-stra....


Tabcorp tipped for $5bn casino tango - Tuesday 12th of April 2005

TABCORP is expected to team up with Village Roadshow for the next round of proposals for Singapore's....


Planned Indiana casino attracts just one bidder - Tuesday 12th of April 2005

Investors led by billionaire Bill Cook of Bloomington, Ind., filed the only application yesterday to....


More Top Casinos Join Player Protection Initiative - Tuesday 12th of April 2005

The number of quality online casinos committed to player-sensitive, international and monitored regu....