(June 26): Casino operator Genting Malaysia will use some 21st Century Fox Inc intellectual property for a theme park near Kuala Lumpur after resolving a dispute that had helped trigger a record drop in the gambling company’s shares. The stock gained Friday, climbing to an eight-month high.
Under a settlement between Genting Malaysia, Fox and Walt Disney Co, the planned Fox World park will be re-named and will use both Fox and non-Fox intellectual property, the Kuala Lumpur-based company said in a statement late Thursday. The parties agreed to dismiss all claims and counterclaims in pending legal action in a US District Court.
The deal follows months of uncertainty over the park after Genting sued Disney and Fox, seeking damages as the US companies withdrew from an agreement to sponsor the Fox World park. News of the Fox pullout helped send Genting shares to their biggest annual plunge on record and prompted the Malaysian casino group to seek more than US$1 billion ($1.4 billion) in damages.
“The full resolution of the Fox saga is a positive development for Genting Malaysia,” Cheah King Yoong, an analyst at AllianceDBS Research, said in a note Friday. “The settlement of legal proceedings against Fox removes a major uncertainty for the group.”
Genting Malaysia shares jumped 5.5% to 3.87 ringgit ($1.29) as of 12.15pm in Kuala Lumpur, the highest level since Nov 2. The stock is up 15% this week, poised for its biggest weekly advance since 2010.
Fox entered into a licensing agreement in 2013 with Genting for the development of what would be the first Fox-branded theme park in the world. In an emailed response to Bloomberg after Genting filed the suit in November, Fox said Genting had failed to meet agreed-upon deadlines.
Fox World was planned as a key attraction at Genting’s casino resort an hour’s drive from Kuala Lumpur. It was expected to broaden the destination’s appeal to the nation’s Muslim residents and achieve a target of 30 million annual visitors by 2020. Gambling is considered unethical and therefore forbidden under Islam.
