According to reports, MGM Resorts International is considering buying Genting Singapore Limited

After successfully acquiring the famed The Cosmopolitan of Las Vegas, American casino operator MGM Resorts International is apparently considering buying Genting Singapore Limited, a rival Asian casino operator.

Asia Gaming Brief reported that such a move by the Las Vegas-based company would occur at a time when several Asian countries are only starting to emerge from under a number of travel and social isolation limitations connected to the coronavirus. According to the source, Genting Singapore Limited is in charge of the massive Resorts World Sentosa development in Singapore. For the final six months of 2021, Genting Singapore Limited's total revenues decreased by 17% year over year to about $381.5 million, while its related gaming receipts fell by 16% to just shy of $267.8 million.

Private conversations:

According to rumors, MGM Resorts International and Malaysian billionaire Lim Kok Thay have already discussed the prospect of MGM Resorts International purchasing Genting Singapore Limited. This 70-year-old man is allegedly the Chief Executive Officer of larger compatriot Genting Malaysia Berhad and controls a dominant 52.76% share in the casino operator registered in Singapore.

Important property:

Resorts World Sentosa, which debuted at the beginning of 2010, is said to have 1,800 rooms distributed over seven hotels and a 160,000 square foot casino with 2,400 slot machines and more than 550 gaming tables. The government recently approved the harborside establishment's request to increase the size of its gaming floor by an additional 5,381 square feet in order to accommodate as many as 800 additional machines. This facility reportedly also holds a gambling license that is not scheduled to expire until 2030.

Suspension of shares:

In a subsequent report, Asia Gaming Brief revealed that Genting Singapore Limited has asked for the trading of its shares to be temporarily halted in response to this new speculative activity. Since the beginning of the year, the value of these individual interests has allegedly decreased by around 3.2%; nevertheless, earlier today, on the strength of rumors, it increased by nearly 9% to be worth as much as $0.57.

Potential issues

However, Asia Gaming Brief also noted that any proposal to buy Genting Singapore Limited might be made more difficult by the requirement that such a deal be approved by both the Ministry of Home Affairs and the Singapore Casino Regulatory Authority. The operator is allegedly required to remain a subordinate and repay any outstanding debts right away in the event that there is a change in majority ownership due to bonds guaranteed by Genting Malaysia Berhad.

competing strategy:

But according to a filing from American investment firm JPMorgan Chase & Company, such a deal may provide Genting Singapore Limited access to Macau's immensely profitable casino business. The company allegedly went on to say that while a full takeover is still a possibility, a partial stake sale to MGM Resorts International is now thought to be more likely. However, the process might still result in a bidding battle.