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Nikkei Markets

Genting Malaysia's related-party deal clouds earnings prospects

Stock falls 15% on proposed purchase of Nasdaq-listed loss-making gaming company

Analysts said Genting Malaysia may be overpaying for the 49% stake in the Nasdaq-listed Empire Resorts.   © Reuters

KUALA LUMPUR (Nikkei Markets) -- Worries over short-term earnings erosion following a proposed acquisition of a loss-making gaming company in New York battered Genting Malaysia's shares, prompting at least three brokerages to cut their views, while others await further clarity on the deal.

Shares of Genting Malaysia plunged as much as 15% on the Kuala Lumpur stock exchange Wednesday after the company announced the $128.6 million transaction. The stock was last down 11.4% at 3.20 ringgit compared to the benchmark FBM KLCI's 0.4% decline.

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