Kuala Lumpur: Casino operator plans expansion
Malaysia’s sole casino operator, the Genting Group, is bolstering its efforts to expand overseas amidst an ever-more competitive casino market in Asia by staking a claim in Britain. Genting, which started as a casino resort, but diversified to include leisure and power operations, set Malaysian markets buzzing last week, announcing it would acquire British casino operator Stanley Leisure.
The group’s Singapore-listed unit, Genting International, which owned 19.8 per cent of Stanley Leisure before the deal, will increase its stake to about 30.5 per cent, triggering a general offer for the entire firm.
Analysts say the conglomerate is anxious to build a presence in Britain, which last year relaxed its gaming laws to allow a slew of new casino licences to be awarded. Genting’s bid for Stanley Leisure, Britain’s largest gaming company, demonstrated “flexible and aggressive management” in a strategy to expand globally, said Vincent Khoo, an analyst with Hwang-DBS Vickers Research.
“The acquisition … provides Genting the avenue to diversify from its Malaysian casino base and to participate in the anticipated brisk growth in the under-penetrated casino business in the UK,” he said.
Analysts say Genting planned to muscle in on the British market with a June proposal to merge Stanley Leisure with rival casino operator, London Clubs Internationa, in which Genting holds a 29.7 per cent stake. Those ambitions were thwarted in late August when LCI accepted a takeover offer from US gaming giant Harrah’s Entertainment Inc.
While Genting’s acquisition of Stanley Leisure was hotly anticipated, its shares fell sharply on Tuesday, the day after the purchase, losing 0.60 ringgit or 2.4 per cent to 24.40 ringgit ($6.65) on profit-taking, recovering slightly to close at 24.50 on Friday. In addition, Khoo said Genting’s share price had come off in the short-term.
(AFP)
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