MGM Resorts Receives $18B Takeover Offer from People Inc
LAS VEGAS – Barry Diller’s People Inc has offered to acquire MGM Resorts International in a deal valuing the casino operator at more than $18 billion.
LISTEN TO THIS ARTICLE:People, formerly known as IAC, already owns about 26.1% of MGM’s outstanding common stock. The company is proposing to buy the remaining shares for $48.30 per share in cash.
The offer represents a premium of about 10.6% to MGM’s closing price on Friday. MGM shares rose more than 10% in premarket trading after the offer was announced.
Diller Says MGM Remains Undervalued
Diller, chairman of People Inc, has held an interest in MGM since the COVID-19 pandemic, when his company began building a position in the casino group as travel restrictions and property closures weighed on casino stocks.
In a letter to shareholders in April, Diller said People would sharpen its focus on MGM, describing the stock as “wildly undervalued”.
“We began investing in MGM nearly six years ago because we believed it represented a rare kind of business: one with real-world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities”, Diller said in a statement.
Diller also said MGM’s management team was “superb” and that People saw an opportunity to support the company’s next phase of growth. He currently sits on MGM’s board and said he would recuse himself from board actions connected to the proposed transaction.
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MGM Holds Major Las Vegas Assets
MGM Resorts operates some of the best-known properties on the Las Vegas Strip, including Bellagio and Aria. The company’s resorts account for a major share of Strip activity, giving the group one of the strongest physical casino portfolios in the US.
The company has faced softer Las Vegas demand in recent quarters, while relying on growth from its Macau operations and digital business.
BetMGM, its online sports betting and iGaming joint venture, remains one of the more recognised brands in the US digital gambling market, even as competition remains intense among leading online sportsbook operators.
Casino Takeover Activity Accelerates
The offer comes during a busy period for casino industry dealmaking. Last week, Fertitta Entertainment agreed to acquire Caesars Entertainment in a $17.6 billion deal, marking another major proposed take-private transaction in the US casino sector.
If People succeeds with its MGM proposal, it would give Diller’s company full control of a casino operator with major Las Vegas, regional gaming and digital assets. MGM Resorts has not yet publicly responded to the offer.
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