KUALA LUMPUR (Sept 21): Shares of Genting Bhd continued to fall after news on Wednesday that the group had divested its stake in Australian gambling outfit Echo Entertainment.
Genting shares closed 11 sen or 1.14% lower at RM8.70. Meanwhile, Genting Malaysia fell to as low as RM3.45 during the day, but rebounded just before the market closed on Friday, closing at RM3.50.
Genting Singapore PLC had sold 39.6 million shares or 4.8% stake in Echo for A$3.99 (RM12.77) per share. The group, however, still holds almost a 5% stake in Echo via its subsidiary Genting Hong Kong Ltd (GHK).
According to a research report by Phillip Securities, the sale resulted in a realised loss of A$12.51 million for Genting Singapore. However, the research house took a positive view on the disposal as it removed doubts on a potential bidding war for Echo.
"Despite the loss, we view the disposal of Echo in a favourable light as its sale removed all doubts and worries that Genting Singapore will be engaged in multi-parties fight for Echo," the research house said.
Both Genting Singapore and GHK each bought almost 5% of Echo in June which sparked a talk of a potential takeover battle with rival Crown Ltd, controlled by Australian billionaire James Packer.
According to news reports from Reuters, Crown currently owns a 10% stake in Echo and had earlier sought regulatory approval to boost its stake in Echo to 25%.
"Genting had also sought regulatory approval to increase its holding, but it was not clear whether Genting has withdrawn the application," said Reuters.