Walt Disney Co and Twenty-First Century Fox Inc have rejected claims in a Malaysian casino operator's lawsuit accusing them of abandoning a licensing contract tied to the planned construction of a Fox-branded theme park.

Disney and Fox said Genting Malaysia Bhd's respective claims against them were "without merit".

Genting shares fell 16.7 percent yesterday, a day after the Kuala Lumpur-based company sued the American media and entertainment companies in Los Angeles for more than US$1 billion (RM4.19 billion).

The decline came before Disney and Fox issued their statements.

According to the complaint, Fox Entertainment Group, under pressure from Disney, breached a 2013 contract to licence its intellectual property for a planned theme park at the Resorts World Genting complex, which is an hour's drive from Kuala Lumpur.

Genting blamed Fox for years of delays, and said Disney, which is buying many Fox assets for US$71.3 billion, wanted to back out altogether because partnering with a gaming company did not fit its "family-friendly" brand strategy.

The complaint also said Fox issued a default notice in a manner consistent with Disney wanting to "kill the deal."

Twentieth Century Fox Film, one of the defendants, rejected that allegation. "The allegation that Disney, rather than Fox, finally decided to declare a default is simply made up," a spokesman said.

Genting said more than 23 million people annually visit Resorts World Genting, which includes a casino, seven hotels, shopping malls, performance venues, gondola lifts and scores of restaurants, bars and clubs.

The case is Genting Malaysia Bhd vs Fox Entertainment Group LLC et al, US District Court, Central District of California, No. 18-09866.

- Reuters