Genting wins Sentosa bid:
We all win
At the risk of sounding like a press release, I am extatic at the Genting consortium winning the bid to build the Sentosa integrated resort and casino. Genting is not the only winner, after its US$3.1 bln proposal was accepted by the government on Friday. We all win: shareholders, the government, and the rest of us in Singapore.
Here's why:
Shareholders win, and not just shareholders in Genting International, and its consortium partners Star Cruises and Universal Studios. Genting shareholders saw their stocks rise 24.1% or 10 cents to 51.5 cents on the SGX today. StarCruises shares doubled to 10 US cents. And CapitaLand, which teamed up with one of the losing bidders, Kerzner? It fell just 1.6% or 10 cents to S$6. As Roger Tan from SIAS Research commented in the Business Times this morning, they are going to be big winners from the extra customers its property developments in Singapore are going to get. To use the analogy of the gold rush, CapitaLand lost the bid for the big nugget, but it's still there selling pick axes and shovels.
The government wins, because it proved all those early predictions wrong that Government-Linked Companies would have the inside running. None of the GLCs that teamed up with international players were part of a winning bid. Las Vegas Sands, which won the bid for the Marina Bay casino some months ago, went alone. Genting simply had the best proposal, in my personal opinion. Getting Universal Studios on board, and getting StarCruises to commit to boosting the cruise line business, were the trump cards (plus they didn't give their proposal the dumb and extremely politically incorrect name Harry's Island). I would not have expected the government to do anything but base their decision on the merits of the proposals at hand.
But deeper, politically, handing the proposal to a Malaysian company was brilliant. It should silence all those critics on the other side of the Causeway who say Singapore companies have free reign in Malaysia, while Malaysian companies barely get a look-in in Singapore. Further, it ties the two countries closer together. And that's where we all win.
ArchivesHere's why:
Shareholders win, and not just shareholders in Genting International, and its consortium partners Star Cruises and Universal Studios. Genting shareholders saw their stocks rise 24.1% or 10 cents to 51.5 cents on the SGX today. StarCruises shares doubled to 10 US cents. And CapitaLand, which teamed up with one of the losing bidders, Kerzner? It fell just 1.6% or 10 cents to S$6. As Roger Tan from SIAS Research commented in the Business Times this morning, they are going to be big winners from the extra customers its property developments in Singapore are going to get. To use the analogy of the gold rush, CapitaLand lost the bid for the big nugget, but it's still there selling pick axes and shovels.
The government wins, because it proved all those early predictions wrong that Government-Linked Companies would have the inside running. None of the GLCs that teamed up with international players were part of a winning bid. Las Vegas Sands, which won the bid for the Marina Bay casino some months ago, went alone. Genting simply had the best proposal, in my personal opinion. Getting Universal Studios on board, and getting StarCruises to commit to boosting the cruise line business, were the trump cards (plus they didn't give their proposal the dumb and extremely politically incorrect name Harry's Island). I would not have expected the government to do anything but base their decision on the merits of the proposals at hand.
But deeper, politically, handing the proposal to a Malaysian company was brilliant. It should silence all those critics on the other side of the Causeway who say Singapore companies have free reign in Malaysia, while Malaysian companies barely get a look-in in Singapore. Further, it ties the two countries closer together. And that's where we all win.
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