Genting Malaysia Berhad plans to take full ownership of Empire Resorts Limited by acquiring the remaining 10% economic interest it does not yet hold. The deal, valued at approximately $80.7 million, includes $41 million in cash and the assumption of a $39.7 million loan. The acquisition is pending regulatory approval but is expected to close by Q2 of FY2025.
Good to know
- Genting Malaysia will fully own Resorts World Catskills, Hudson Valley, and Resorts World Bet.
- Empire Resorts has never turned a profit despite over $720 million in capital injections.
- Analysts warn the acquisition may increase losses and debt burden for Genting Malaysia.
Currently, Genting Malaysia holds 49% of Empire’s common stock and 100% of its convertible preferred stock. The remaining 51% stake is owned by Kien Huat Realty III Ltd, the Lim family’s investment arm. With this acquisition, Genting Malaysia would take complete control of Empire’s assets, including the Resorts World-branded casinos in New York and its online sportsbook platform.
However, analysts remain skeptical. Tushar Mohata and Alpa Aggarwal from Nomura labeled the move as negative, pointing to Empire’s ongoing losses and the lack of a clear turnaround strategy. They also noted that Genting Malaysia would now need to consolidate Empire’s full financial results, potentially deepening overall losses.
The deal also follows a weak Q4 2024 performance from Genting Malaysia, which triggered a dividend cut and led to a further drop in share value. Nomura has downgraded the stock from “Buy” to “Reduce,” citing challenges such as rising interest expenses, post-COVID recovery struggles, and operational costs that have not been offset by returns on capital expenditure.
Maybank Investment Bank and Hong Leong Investment Bank have also raised red flags. HLIB, in particular, argued the price tag is excessive, estimating Empire’s value at an EV/EBITDA multiple of 72.7—well above the U.S. casino industry average of around 10.
Financial pressure is expected to rise. HLIB projects the group’s borrowings could increase by RM1.3 billion ($310 million), pushing the gearing ratio to 1.15. Annual interest expenses could grow by up to RM70 million ($16.54 million) in FY2026–2027.
Empire-related losses are also expected to rise. Analysts believe Genting Malaysia’s share of these losses could increase by RM23 million ($5.43 million) in FY2025, which might cut earnings by 3.5% over the next three years.
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