Tuesday, June 26, 2012

Genting HK

Genting HK : is down 1.6% at US$0.315, with the typically thinly traded stock not reacting much despite a source telling Dow Jones it applied to Australian regulators for permission to increase its Echo (EGP.AU) stake above the 10% limit. It may spur speculation GENHK will be Genting's vehicle for any run at Echo, rather than sister company Genting SP . All the players have been tight-lipped on intentions, with speculation ranging from a possible bidding war with Crown (CWN.AU), to a joint bid, possible asset cherry-picking or just an investment. Based on Echo's 719.84 m shares outstanding, a 10% stake would cost around A$304.5 m at the current share price; GENHK already holds ~5.1%, while GENS has ~4.8%. As for financing a deal, GENHK's 2011 annual report indicates it has US$568.2 m in cash and cash equivalents. GENS is +0.4% at $1.42, hovering around recent support levels. GENHK's Hong Kong-listed shares (0678.HK) are untraded.

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