Genting has Secured 50.08% of Resorts World

The buying was aggressive; ramping up for three straight days. They achieved their aim. Genting secured 50.08 % of Resorts shares yesterday, ensuring that control over the casino operator stays with Genting Bhd, its parent.

Feverish buying started on Friday(20 July 2007). Some nine million shares were purchased and Resorts' price jumped 14% to close at RM4.46. Resorts World then bought another 19.1 million shares yesterday for a total of RM85.8 million.

Citigroup Inc said in a research report that Resorts may buy back another 90 million shares to avoid having to pay a high price. Citigroup calculated that if all bondholders decide to convert their paper into new shares of Resorts World, Genting's stake would fall to 48.44 per cent. To lift the stake, Resorts World would possibly buy more of its shares and then cancel them.

Genting closed at RM8.55 today for a 20 sen gain while Resorts whimpered home with a 14 sen loss to RM4.32 on a slightly reduced volume of 208 million shares. The low for Resorts today was RM4.28. Is this the end of the ramp-up?

Will Resorts buy some more of its own shares to starve off the potential reduction of Genting's holding in Resorts upon the bond conversion? Have it exceeded the 10% legal limit?

It may have to do some share cancellation quickly if it wants to buy some more.

Heartsong