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Genting Malaysia bids to privatize Resorts World Catskills

Genting Malaysia has announced plans to privatize the currently-loss-making Empire Resorts Inc, the company which owns and operates Resorts World Catskills in New York.

The announcement, however, saw Genting Malaysia shares tumble almost 12 percent by Wednesday's close, making it one of the top losers on Bursa Malaysia. 

Genting said the acquisition will be made by its wholly-owned subsidiary Genting (USA), which will acquire 13.2 million shares in Empire Resorts Inc from its single largest shareholder, Kien Huat Realty III (KH) for $128.6 million. 

The 13.2 million shares represent around 46 percent of common stock of Empire Resorts Inc.  

Genting said the move will better position the Resorts World brand in the northeastern US gaming market through more effective cross-marketing with Resorts World Casino New York City.

Analysts were largely neutral on the move, with RHB Research noting that if Genting Malaysia were to undertake a similar greenfield expansion that it would likely cost more. 

Maybank Investment Bank has maintained its earnings estimates for Genting Malaysia. 

However, Hong Leong Investment Bank (HLIB) downgraded GenM to hold from  Buy, reflecting the risk of short-term earnings erosion in relation to the acquisition.

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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