Owners Sell 9% in Genting Singapore for $425 Million

The family that owns Malaysian gaming firm Genting sold about 9 percent of shares in its Singapore unit to institutions on Wednesday, raising $425 million, two sources with knowledge of the deal told Reuters.

A total of 853.8 million Genting Singapore shares were sold at S$0.72 a share, a discount of around 17 percent to its last closing price, raising S$615 million.

The sale, through the family's vehicles Golden Hope and Lakewood, was aimed at boosting the stock's liquidity, according to one of the sources.

Shares of the unit dropped more than a fifth, inviting a query from the Singapore Exchange about the sharp price moves. In Malaysia, shares in Genting Bhd, which is controlled by the family of Chairman and CEO Lim Kok Thay, fell 4.5 percent.

The Genting Singapore shares were sold at the lower end of a S$0.72 to S$0.76 per share range listed in a term sheet seen by Reuters.

UBS and JPMorgan are joint book-runners for the secondary placement, the sources told Reuters.

Genting officials in Singapore and Malaysia declined to comment. The sources did not want to be identified because the deal is not public.

Scouting For Investments

Analysts in Malaysia said it's no secret that Genting has been scouting around for investment opportunities in Macau and Las Vegas, but the Genting Singapore stake sale appears to be a deal to take advantage of the steep rise in the firm's share price. 

Genting Singapore shares had more than doubled since early March to S$0.89.

"It does make logical sense for the Lim family to lock in some form of capital gains from their own direct stake," said Keith Wee, analyst at OSK Investment Bank.

Genting shares in Malaysia are up 7.6 percent since May 20 when the gaming group said it and unit Resorts World subscribed for a combined $100 million worth of notes issued by MGM as part of its $1.5 billion fund-raising exercise.

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"They've always said they want to enter Macau and Las Vegas. There's always the possibility that these are somehow connected, but I would imagine if there are investment opportunities, it would be done via Resorts World," said Liong Chee How, analyst at Kenanga Investment Bank.

"They have a very strong, very clean balance sheet. There is no reason not to take advantage of that," he said.

Resorts World had net cash of 4.65 billion ringgit as of end-2008 and zero borrowings.

Genting Singapore, which also owns casino assets in Britain, is building the city-state's second casino that will open by mid-2010.

Genting Bhd, the holding company of the Lim family, has a 54.5 percent stake in the Singapore-listed arm, while various family vehicles controlled around 9 percent before Wednesday's stake the sale, according to Thomson Reuters data.

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