Betting on the improved economy and moderate economic growth, Genting Malaysia has decided to acquire the gaming business of Genting UK from its parent company, RWI International Investments Ltd. to bring various modes of businesses such as mobile, online and retail under single management.The deal, which is worth $11 million, will be financed by internal cash flow from the parent company or the subsidiaries.

Genting Bhd and its owners, the Lim family, are disposing their online gaming business in the UK to Genting’s 49.3 per cent-owned subsidiary, Genting Malaysia Bhd, for £7.2 million ($10.92 million) cash. This is to help streamline the group’s gaming business there under a single management team.

The UK online gaming business is currently held under the Genting Alderney Ltd, a wholly-owned unit by RWI International Investments Ltd, in which Genting and its chairman and chief executive Lim Kok Thay each has a 50 per cent indirect interest. Currently, Genting Malaysia operates land-based casinos in the UK through Genting UK Plc, its indirect wholly-owned unit.

Genting Malaysia’s indirect wholly-owned unit Nedby Ltd entered into a conditional sale and purchase agreement today with RWI International for the acquisition, according to Genting Malaysia’s filing on Bursa Malaysia.

Genting Malaysia intends to finance the purchase using internally-generated funds of the group and/or its subsidiaries. As at June 30, Genting Malaysia’s cash and cash equivalents stood at MYR2.75 billion. “Genting Malaysia Group is optimistic about the future outlook of the UK online gaming in the long term as the operating environment in the UK gradually strengthens and the economy improves moderately.

“Following the proposed acquisition, the operations of Genting Alderney and GUK are expected to be streamlined as an integrated online, mobile and retail gaming business under the focus of a single management in order to deliver a seamless multi-channel customer experience in the UK,” the company said in its filing.

Genting Alderney’s presently offers live online casino, casino games, sports betting and poker over the Internet. It has a full e-gambling licence from the Alderney Gambling Control Commission and a combined remote operating licence from the Gambling Commission of the UK to manufacture, supply, install or adapt gambling software, to operate casinos and to act as a betting intermediary. Genting Malaysia’s shares closed MYR0.05 or 1.2 per cent higher at MYR4.20, with a market capitalisation of MYR23.81 billion, while Genting was up MYR0.17 or 2.34% at MYR7.44, which gives it a market capitalisation of MYR27.66 billion.

Source : Deal Street Asia