People Inc. bids $18 billion to take MGM Resorts private
The nonbinding proposal values MGM Resorts at $18 billion, representing a 10.6% premium over Friday’s close and roughly 30% above its 90-day volume-weighted average price.
Barry Diller’s People Inc. has submitted a nonbinding proposal to acquire the remaining 73.9% stake in MGM Resorts it does not already own, aiming to take the casino operator private. The deal values MGM at approximately $18 billion, with an offer price of $48.30 per share in cash. This valuation represents a 10.6% premium over MGM’s Friday closing price and sits roughly 30% above its volume-weighted average price for the preceding 90-day period.
People Inc., which completed its rebranding from IAC in April, currently holds a 26.1% stake in MGM Resorts. The announcement triggered an immediate market response, with MGM shares climbing over 10% in premarket trading on Monday. Shares of People Inc. also rose, gaining nearly 3% during the same session.
Barry Diller, who serves on MGM’s board of directors, would recuse himself from any board vote regarding a potential deal. The proposal is not yet finalised and could be delayed or scrapped, according to reports. Diller’s investment in MGM dates back to the height of the COVID-19 pandemic, when casino shutdowns and travel restrictions depressed the company’s share price. In an April 28 letter to shareholders, Diller described MGM stock as “wildly undervalued” and stated that People Inc. would sharpen its focus on the stake.
The bid arrives amidst a wave of consolidation in the casino sector, following a $17.6 billion deal unveiled last week in which Tilman Fertitta’s company agreed to acquire Caesars Entertainment. MGM owns properties accounting for roughly 40% of the Las Vegas Strip, including the Bellagio and Aria. However, weak visitor volumes in Las Vegas have recently pressured the company, leading it to rely more heavily on Chinese venues, such as those in Macau, and digital revenue streams.
Through its BetMGM platform, MGM has established a prominent position in the competitive U.S. online sports betting market. The proposed acquisition would see People Inc. consolidate its control over the casino giant, potentially allowing for strategic shifts in a sector facing evolving consumer habits and regulatory landscapes.
