Key Takeaways
- People Inc., led by Barry Diller, is reportedly preparing a cash buyout offer for MGM Resorts valued at $48.30 per share
- The proposed transaction would value the casino giant at approximately $18 billion, targeting the 73.9% stake not currently owned by People Inc.
- Shares of MGM surged as high as 15% to reach $50 during premarket hours on Monday
- People Inc. currently maintains a 26.1% ownership position in MGM and controls two board positions, including Diller’s seat
- The proposed offer price reflects a 10.6% premium above MGM’s previous Friday closing level
Barry Diller’s People Inc. is moving forward with preparations for an all-cash acquisition proposal targeting MGM Resorts International, which would value the casino and entertainment company at over $18 billion, The New York Times’ DealBook disclosed on Monday.
MGM Resorts International, MGM
Shares of MGM climbed as much as 15% to the $50 mark during premarket activity following the disclosure.
The reported 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 reflects a 10.6% premium compared to where MGM closed the previous Friday.
People Inc., which underwent a rebrand from its former IAC identity, currently controls a 26.1% stake in MGM, positioning it as the casino operator’s dominant shareholder.
Diller personally occupies one of the two board positions that People Inc. maintains at MGM. Joey Levin, who previously served as IAC’s chief executive, also holds a board seat.
Should the transaction proceed to completion, it would represent a complete acquisition — transforming People Inc.’s substantial minority position into complete control of a leading casino gaming enterprise.
Transaction Structure and Details
The reported proposal is designed as a pure cash transaction, with no equity or stock exchange elements mentioned. People Inc. would be required to finance the purchase of approximately three-quarters of a corporation that operates some of Las Vegas Strip’s most iconic casino resorts.
MGM’s real estate holdings feature landmark properties including the Bellagio, MGM Grand, and Aria. The organization has also been expanding its presence in sports wagering and digital gaming platforms over recent years.
No specific timeline has been disclosed regarding when a formal proposal might be presented to MGM’s board of directors.
Current Status and Next Steps
Both MGM Resorts and People Inc. declined to provide comments to Reuters or Barron’s when contacted about the reported transaction.
Given that both Diller and Levin occupy board seats at MGM, any formal takeover proposal would likely necessitate review by a special committee composed of independent directors to assess the offer — a typical procedure when parties with insider positions are involved on both sides of a potential deal.
This evaluation process could extend the timeline before any official determination becomes public.
People Inc. completed its rebranding from IAC earlier this year. The firm has maintained its MGM stake for an extended period, and the two companies have shared close leadership connections throughout that time.
The $48.30 per share figure represents the reported offer amount. MGM’s premarket trading at $50 indicates the market may be anticipating either a higher final closing price or the possibility of a rival bidder entering the picture.
As of Monday morning’s premarket session, MGM shares were trading more than 10% higher ahead of the market open.
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