I think they will get rid of it if they have a chance. But, the current operating environment in UK is so harsh that no one is willing to give them a fair bid. Or perhaps UK govt may finally legalize super casinos to cover their budget deficit. As you said, the top bracket gaming tax is 50%, so, if the UK govt can create at least an additional GBP 2b dollar gaming industry, they can get extra GBP 1b in tax. If it really turn out that way, then, it has a good ending. So, the only reason for GENM to justify this acquisition is that they are holding an option of UK finally legalizing super casinos, if the option turn out that way, then, it is a great deal for GENM. I am not sure whether the current coalition government can make such a decision.

But, if situation remains the same, Gen Uk may be profitable when the economic situation get better and their strategy of closing down more casinos starts to bear food. There are signs that closing down unprofitable casino is doing good for their bottom line. But the profitability generated when economy recover will still be negligable. Hopefully, the casino complex GEN UK is building in Birmingham turn out well. Then, at least those shareholders in GENM can have some returns on their investment.

For WDG, I have to admit that I do not follow it that closely. But, I guess, even they manage to turn it around, the improvement will not justify the initial investment GENM pay when taking it over from the Lim family arm.

So, i think GEN UK is currently a bad deal, but, with an option to turn out well. WDG is a bad deal.

But, I think the decision to buy over GEN Uk is to mainly unlock the value of GENS. Cz the Genting group will still hold this option regardless of whether GENUK is in GENS or GENM hands. But, GENM can justify this acquisition that they do not buy the GEN UK for its current state of operation, but, also for an option of to build UK super casinos in view of worsening budget deficit in the UK govt.

This post has been edited by the snowball: Jul 3 2010, 08:04 PM

This was the comment put up by analysts.

This post has been edited by cherroy: Jul 3 2010, 11:52 PM

Hi
I can see GenM minority interest is totally disregard in this case.

However I don't understand how the 'Listed Group' will benefit? GenS gained & GenM suffered. Investor in S'porean stock gained & M'sian stock suffered. Why the 'Controlling person or group' do this?

Or is it all just for someone or small group's benefit?

---

Added on July 4, 2010, 12:41 pmThis will make a very 'good' (dirty) story in Corporate game. Do the RPT not once but twice to really slam the price down & eliminate completely investor confidence. Now by offerring a slight premium to take it private (say RM3), ppl will accept it without much hesitate. This is still very cheap consider company SOP & the 'remaining' 2/3 cash pile of 3.2 billion.

Once in private, transfer the CASH to my account, sell all valuable assets AND after 1~2years re-list it by taking loans (more cash for me) to 'leverage' on the balance sheet debt ratio.

Wa la la this how 'I' can transform from Super rich to Incredible Rich!

P/S: Gov might changed anytime & gambling license can be granted but taken back too. So why not take the money & run?
my fren the sugar king orede cash out & run. I better hurry up!


This post has been edited by ooyah98: Jul 4 2010, 12:41 PM

There are several reason which I can easily think of, I don't mean it is the intention of the resolution or not, just my pure guess.

GenM has lot of cash, GenSP needs some cash.

So in ordinary sense, GenSP if needs cash further, they may need to raise it through bank borrowing which may incur interest charges.

With the disposal resolution, GenSP can get extra cash, at the mean time, GenM just having lesser cash which previously is just sitting in the bank doing nothing one.

So as parent company of both, it seems quite a ideal deal. GenSP can get cash without borrowing, while it doesn't hurt the benefit of parent company, instead saving potential borrowing cost is beneficiary to the parent company.

If you think from the parent company perspective, then the resolution seems quite ok and brilliant, but not on GenM perspective.

That's why Genting share is not affected in the market after the resolution being proposed.

This post has been edited by cherroy: Jul 4 2010, 04:38 PM

Does anyone think that a company shall pay more dividend to its shareholder if it's earning more (growing yoy) or having tons of cash?

No offense, but if you do, you are being naive.

The market seems forgiving about Genting's RPT. From previous RPT, it seems like share price will recover after the market "forgets"? I think that's why Genting not afraid to do RPT. On the plus side, those who can get the shares at the lowest point when the market factors in the RPT stand to gain when price recovers

Not sure whether GenM share price has been fully factored in or not, with current RPT.

But I do know one analyst has cut the Fair Value of GenM from about rm 8 to as low as rm 4. I believe some analysts think at current price of GenM is fully valued.

Note: Fair Value is just a pure guideline. But something to guide is better than none if you are a value investor.

If you are a value investor, you may want to give some further discounts to future RPTs ( probably ) , then you may have concluded GenM is in fact not very undervalued as before. And the risk is getting higher.

Just my view.

This post has been edited by SKY 1809: Jul 4 2010, 09:46 PM

current restructuring is a matter of cleaning up GenS' balance sheet. too bad for GenM shareholders though.

are u talking about GENT? GENM shares where got at tat price ler.. its now only RM2 somthin....

What ya think of GENM price gonna be today?
Is it a good buy if it drop very much by the end of the day?

Genting Malaysia is the last bidder remaining for Aqueduct Racetrack
after two other bidders were disqualified. SL Green Realty Corp-Hard
Rock International- Clairvest JV consortium and Penn National Gaming were disqualified as the proposals did not conform with the equirements but attempted to nego tiate for terms more favourable to the bidders.

Can this news boost GENM share price up ?? still got to wait till 3/8/2010 for outcome.

Hi
Anyone has access to below Morgan Stanley report? why the overweight call?

Genting rises on 'overweight' call
http://www.btimes.com.my/articles/20100713090947/Article

Genting Malaysia Bhd, the country’s sole casino operator, rose the most in three weeks in Kuala Lumpur trading after Morgan Stanley initiated coverage of the stock with an “overweight” call and RM3.05 share forecast.

The stock rose 1.1 per cent to RM2.69 at 9:05 a.m. local time, set for its biggest gain since June 18. -- Bloomberg

Finally genm start boost.

They just hit the forecast price today

The octopus predicted this a few post back

Guys any idea whats the reason? After holding for 3 years....finally...

What a surprise today..

i also wonder how come suddenly boast...good news anywhere.

What a sudden surge! I missed it when it was RM8.20.

Any idea what's happening?