Deal held up
In a recent statement issued to shareholders, Genting Malaysia confirmed that it plans to push forward with its Empire Resorts merger, even though the deal is currently being held up by a lawsuit.
David Mullen, who owns shares in Empire Resorts, launched the lawsuit in early October, claiming shareholders were deliberately kept in the dark. He alleges that this potentially prevented Empire Resorts from securing a better deal during merger negotiations.
prevented Empire Resorts from securing a better deal during merger negotiations
Genting Malaysia has now responded, communicating to its own shareholders that the lawsuit surrounding the merger is “without merit”.
Preference shown for Genting
Although Empire Resorts agreed to the 49% merger back in August, the lawsuit specifies that it did not take into account the views of individual shareholders.
The lawsuit also states that Mullen believes preference was shown to Genting Malaysia, allegedly resulting in Empire Resorts’ stock price being devalued as a result of a lack of competitive bidding.
However, despite the delay, it seems that Genting Malaysia is not fazed by the threat of legal action. The company told shareholders on October 17 that it will fight the accusations and conclude the deal, stating:
The defendants deny all such allegations, believe the merger litigation is without merit, and plan to defend against all claims stated therein.”
Empire suffering losses
The deal was struck following a difficult few years for Empire Resorts. It declared a $140m loss in 2018, with account showing debt of around $533m.
If the merger goes ahead, Empire Resorts will sell a 49% share to Genting Malaysia, with the other 51% already owned by Kien Huat Realty III.