Genting takeover of Genting Malaysia unlikely to trigger full privatisation, analysts warn

KUALA LUMPUR, Dec 3 — Analysts have warned that Genting Berhad’s (GENT) recent takeover of Genting Malaysia (GENM) is unlikely to lead to full privatisation, while the deal could heighten credit rating downgrade risks for both companies.

Genting increased its stake in GENM from 50 per cent to 73.13 per cent after acquiring an additional 23.13 per cent at MYR 2.35 per share, worth a total of MYR 3.1 billion (US$750 million). However, the final stake fell short of the more than 75 per cent threshold needed to delist GENM from the stock exchange.

CreditSights analysts expressed surprise at the strong shareholder participation, which exceeded expectations. They had anticipated Genting would acquire only 10 per cent to 15 per cent additional stake, bringing its total holding to 60 to 65 per cent, given the offer price represented a modest 10 per cent premium over GENM’s pre-announcement share price and lagged the average price over the past four years.

Kenaga Investment Bank, GENM’s independent advisor for the deal, had recommended shareholders reject the offer, citing an unreasonable price.

The takeover could increase the risk of credit rating downgrades. Moody’s and Fitch may lower Genting’s rating to Baa3/BBB-, while GENM’s rating would also be affected. Pro-forma figures for the first nine months of 2025 suggest Genting would have breached downgrade triggers for retained cash flow, gross leverage, and EBITDA net leverage.

“The situation is less clear at S&P, which may assign a negative outlook rather than an outright downgrade,” analysts said, noting that potential asset sales, such as a Miami land parcel, could improve financial metrics and mitigate downgrade risk.

The deal comes as Genting New York (GENNY), a Genting subsidiary, recently won one of three Class III casino licences in New York — a development seen as positive for GENM’s expansion plans.

Despite the larger stake, analysts say full privatisation of GENM remains unlikely, and Genting’s commitment to support GENM’s New York casino build could further weigh on credit metrics.