Well the value of GENS will be unlocked since they are no more write-downs. This may also indicate that the Singapore operations is going extremely well that they want to do the deal fast to bring it off their books. Today is first of July, so, the 2nd Quarter just closes. This will make GENS carry another quarter of GEN UK result on its books. I think it is on purpose they announce today so that GENS have a clear 3rd Q without GEN Uk dragging them down. Doing it on 1st July also means the GENM side do not need to carry the deal on its books for 2nd Quarter. So, in the event that GEN UK result really bad, some GENM may not have notice that if they don't pay attention to GENS announcement. So, this will give the shareholders time to cool down and don't get that angry.

All these corporate move I think have been planned ahead all this while. GENS just take a huge impairment on GEN UK asset on 1Q, probably preparing for disposal to GENM. Then, GENS somehow issues a big chunk of share options of GENS to LKT and the gang for successful opening of the Singapore operation. In fact, the Singapore operation is just a few months old, how you judge it is successful when, at the time of the option approval, Marina Bay Sands has just opened at most for a few weeks? They are basically rushing out the options so that they can make it in time before the disposal is made so that they will make money from these options when GENS price explode.

This bags a question. Where on earth is GENM independent directors? What they are doing? Most laughable is GENM COO statement :"The acquisition
of Genting UK presents GENM with an opportunity to grow, with the resources at our disposal. This acquisition will also provide us with access to established casino brands and an extensivenetwork of casinos already operating across the UK. The acquisition of Genting UK presents GENM with an opportunity to grow, with the resources at our disposal.This acquisition will also provide us with access to established casino brands and an extensive network of casinos already operating across the UK. With our proven track record and decades of experience, we have the expertise to unlock the potential of Genting UK and grow the UK business.’’ Mr COO, I thought Genting is always run as adik-beradik company, as in you share your management talent around. So, how come by changing hands from GENS to GENM, GEN UK can suddenly be a good business? If your management skill is so good, why don't LKT faster tell you to go GENS to turn GEN UK around?

For question on buying GENS,I personally prefer Genting Bhd as it is the cheaper play on GENS, but, this news will be treated as neutral i guess at Genting Bhd level. But, GENS may increase with analyst re-rating. Rational market will see Genting Bhd to increase when GENS increase, but, as we can see previously, even though GENS increase a lot, Genting Bhd increase by a bit only. So, GENS will be a more direct play.

But, I would not touch Genting Bhd at current price level because the management will rip you off anytime, so, you need a margin of safety. GENS is also expensive on the fundamental side. But, market is irrational. I won't touch both of them at this level.

BTW, I own Genting Bhd shares, so, my view may be bias. Do take it with a pinch of salt.

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Added on July 1, 2010, 11:54 pmJust write a post on my blog about this acquisition. Feel free to read if you are interested: http://goodstockbadstock.blogspot.com/2010...d-it-again.html



This post has been edited by the snowball: Jul 1 2010, 11:56 PM

lengthy-nya......

lets put it this way, from where i am seeing it. 3 major points :

GENM has a cash hoarding of 5 BIllion,
GENUK operations are on a decline, operations structure are not as good as RANK's G-casino concepts. Badly needs refurbishments.
GENS on the other hand needs to concentrate on their current operations. Insufficient cash for distribution. (look at the debt thy assume... u'd get the idea)

who else can provide that sort of capital injection??

Maybe you werent aware, GENS and GENM both have very capable COO leading the company to glory. And there is a very obvious reason why GENM's COO cant jus go over to GENS to make good with GENUK.

there isnt sufficient resources to do anything...

but i guess this is IMO la. haha.

wat do u guys think? you'd think GENUK operations are that bad? i guess it has to do with the huge taxes thy are charged on.

I don't like how they are just selling GEN UK to GENM. The UK casinos still aren't doing very well, and it just seems like they are disposing the not so profitable businesses to genm and get some of genm's cash over to gens.

They can do so much better with the 5b cash in hand.

for example? money ada.. but project tak ada.. lol

thy arent doing well cause there isnt much capex spend in the last few years..

You are thinking on a Genting Group basis. But, GENM shareholders do not buy into GENM so that their cash hoard can use to subsidize their sisters company. They expect it to use for acquisition. The management have been talking about expansion into Vegas and Macau for years? Where are the acquistion? A listed company should be run as seperate legal entities, eventhough it is part of a group. It is just poor execution from Genting as usual.

There are sufficient resource to go around. Basically, GENM is in autopilot. You don't need a genius to run a monopoly. The best talent should go to turning around the company most troubled operations. That's what great companies are doing, they put their best guy into bad businesses to gain experience and groom them for future leadership position.

The resources is more than sufficient. GENS CFO is actually from GENM due to internal reshuffle earlier in the year. In a conglomorate, management talent is usually shuffle around between different companies.

As for huge taxes, you don't get tax when you are losing money. GEN UK is making negligable sum on EBITDA basis so, net profit wise, there probably lose a lot of money as it is rather capital intensive with all this casinos. UK operation is a bad luck and bad call. They buy in big time into UK expecting a legaslative change to allow Vegas-style super casino in UK. Then, the sentiment in the country changes and the legislative change is put on ice. All the premium that GENS previously paid for its UK operations are for this legislative changes, the changes do not take place, so they lose money. I do not expect any changes to the casino legislation soon as UK now has a coalition goverment of Conservatives and Liberal Democrats in place. So, it is hard to pass tough legislation. Plus, UK is implementing austerity measure in the most recently announced budget, it will means slower growth.

people buying in GENM just mainly due to its huge pile of cash in the bank. LKT now is trying to squeeze whatever cash it has inside GENM in order to "take over" all the losing business from the entire GENTING group. Acquisition of whatever gaming in Vegas is just bullshit to the shareholders. Uncle Lim will jump out from the coffin 1 day in the future seeing his son fooling all the shareholders who pay respects to him.

GENM is worth only to collect its annual voucher. Even the voucher given has already shrink to 1 instead of 2.

Yup A lot of people buy into stock analyst spin about the cash per share in GENM. In fact, in a business that is badly managed, the cash per share is not a good metrics to use. Investors need to discount the cash per share figure. I hope Uncle Lim can rest in peace. If you compare LKT with Francis Yeoh, both second generation of the family group, LKT really lose by a mile.

Haha..even the voucher sometimes also not worth it liao. Genting hotels sometimes RM30 per night also can get.

LKT has one good thing compared to Francis Yeoh...
He is taking the highest pay among all the listed company CEO

Is this a good thing? You do know that wall street CEOs are coming under fire due to extremely extravaganza high pay and yet underperform

I don't mind CEO's getting hundred of million, if the company is generating 7-10% consistently and sustainable dividend, and minority shareholders benefit are well taken care of.

Stock plunged 7.8% on the opening bell. The market has voted their dissaproval & Indignant.

but LKT will not care, he is still the highest pay regardless the share holders cursing ...

I am moving GENM from blue chip to xxx stock ... dun know how to describe but basically LKT reputation is as good as Vincent Tan now

GENM only good at one thing......"RRPT".
That is how they get the money out.

What are the chances of the deal NOT going thru?
I may be wrong but I understand that LKT may not vote on this matter since there is a conflict of interest, so its up to the minority shareholder...right?

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Added on July 2, 2010, 4:35 pmIn any case, Genm shareholders pls vote a strong "NO"

... or better yet, just dump the share

This post has been edited by PBB boleh: Jul 2 2010, 04:35 PM

Already empty my GENM from my portfolio, only managed to secure near 20% gain. But I consider it great lose because I picked GENM between GENM and Top GLove in March 2009. This lesson is costly.

There is no rules to stop the major shareholders or anyone to vote in the proposal or resolution.

It depends all the shareholders across based on %.

Don't get the meaning wrong....I am actually teasing him....

In the case here the dividend is peanuts

But this is clearly a "related party transaction" so the the controlling shareholders cannot vote, right???

They can restrain from voting but there is nothing stopping them from voting

Is there any rules/law stated in RPT transaction, that controlling shareholders cannot vote?

If it is, the surely a lot of RPT transaction being rejected by minorty shareholders before, but we are seeing little RPT transaction being rejeted before as far as I know.

I only know RPT needs to be declared openly to all.