Genting SP: Macquarie says GENS is likely to pursue gaming acquisitions over greenfield investments after piling up cash in recent fundraising efforts, and Australia's Echo Entertainment (EGP.AU) is an attractive target. Notes that most regional targets have large founding shareholders--with EGP being the only company that has one of the most open shareholder registers following its recent demerger from Tabcorp and an asset base which could likely be of interest to GENS, which has previously sought licenses in the cities Echo operates in.
Says, an acquisition of Echo Entertainment would help GENS to build a regional footprint and gain access to a gaming concession in a "gateway" city, Sydney. Adds, Sydney and the Gold Coast are popular destinations for Asian travellers. The house believes GENS can fund an acquisition of Echo--a move likely to be highly EPS accretive--without raising equity, and still be able to take opportunities in Japan and Korea when they arise.
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