Media mogul Barry Diller’s People Inc (IAC.O) has proposed to acquire casino operator MGM Resorts (MGM.N) for more than $18 billion. The digital media company, known for publications like its namesake magazine and Food & Wine, offered $48.30 per share in cash for the remaining shares, representing a premium of approximately 10.6% to MGM’s Friday close. This bid marks the casino industry’s second major takeover proposal in a week, following hospitality billionaire Tilman Fertitta’s $17.6 billion deal for Caesars Entertainment (CZR.O). The sector is currently navigating slowing consumer demand and high debt loads, contributing to shares lagging the broader market this year.
People Inc currently holds a 26.1% stake in MGM Resorts. Mr Diller views MGM as undervalued, seeing the increased stake as an opportunity to diversify beyond People’s core media business. If successful, People expects to own just over 50.1% of MGM’s equity. MGM Resorts has confirmed receipt of the offer and stated its board would review the proposal, in consultation with financial and legal advisers, before determining next steps. Mr Diller’s interest in MGM dates back to the COVID-19 pandemic, with People accumulating shares when the casino operator’s stock was significantly impacted by closures and travel restrictions.
Following the announcement, MGM Resorts shares surged 14.5% to $50, trading above the offer price, while People Inc shares slipped 0.5%. Jefferies analyst David Katz commented that the transaction “could act as a catalyst for incremental deal activity across the (casino) group.” Mr Diller reiterated his belief that MGM represents “a rare kind of business: one with real-world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities.” While MGM, owning roughly 40% of the Las Vegas Strip, has faced sluggish footfalls there, it has seen growth in its China assets and its BetMGM venture, a leading U.S. online sportsbook, which analysts are bullish on.
