TLDR
- People Inc., led by Barry Diller, is positioning itself to make an all-cash acquisition proposal for MGM Resorts at $48.30 per share
- The proposed transaction would value the casino giant at approximately $18 billion, targeting the remaining 73.9% stake not currently owned by People Inc.
- Shares of MGM skyrocketed up to 15% reaching $50 during Monday’s premarket session
- People Inc. currently controls 26.1% of MGM’s outstanding shares and maintains two positions on the company’s board of directors, including Diller himself
- The proposed offer price reflects an 10.6% markup compared to MGM’s share price at Friday’s market close
According to a Monday report from The New York Times’ DealBook, Barry Diller’s People Inc. is moving forward with plans to launch an all-cash acquisition proposal for MGM Resorts International, a transaction that would place a value exceeding $18 billion on the casino and resort operator.
MGM Resorts International, MGM
Shares of MGM experienced a significant surge during premarket trading, climbing as high as 15% to reach the $50 mark following the disclosure.
The anticipated offer stands at $48.30 for each share of the 73.9% portion of MGM that remains outside People Inc.’s current ownership. This valuation marks a 10.6% increase above the stock’s final trading price from the previous Friday.
People Inc., which operated under the IAC name until recently, currently maintains a 26.1% ownership position in MGM, establishing it as the casino company’s principal shareholder.
Diller personally occupies one of the two director positions that People Inc. maintains on MGM‘s board. Joey Levin, who previously served as IAC’s chief executive, holds the second seat.
Should the transaction proceed to completion, it would represent a complete acquisition — transforming People Inc.’s substantial minority position into full control of a major player in the casino and gaming industry.
What the Deal Looks Like
The proposed transaction is configured as a pure cash arrangement, with no stock or equity elements mentioned in reports. People Inc. would be required to secure financing for acquiring approximately three-quarters ownership of a corporation that operates several iconic properties along the Las Vegas Strip.
MGM’s asset collection features renowned destinations including the Bellagio, MGM Grand, and Aria. In addition, the corporation has been expanding its presence in sports wagering and digital gaming platforms over recent years.
No specific timeframe has been disclosed regarding when a formal proposal might be presented to MGM’s board of directors.
Where Things Stand
At the time reports emerged, both MGM Resorts and People Inc. declined to provide statements to media outlets including Reuters and Barron’s.
Given that both Diller and Levin serve as MGM board members, any official acquisition proposal would likely necessitate formation of a special committee composed of independent directors to assess the offer — a conventional procedure when insiders participate on both sides of a transaction.
This evaluation process could extend the timeline before any determination becomes publicly available.
People Inc. underwent its rebrand from IAC during the current year. The organization has maintained its MGM investment for an extended period, and the two entities have shared leadership connections for considerable time.
The reported $48.30 per share proposal price has been specified in media accounts. However, MGM’s premarket trading at $50 indicates market participants are factoring in some likelihood that the final deal could close at an elevated price point, or that alternative bidders might surface.
As of Monday’s premarket session, MGM shares were demonstrating gains exceeding 10% prior to the market’s opening bell.
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