Media mogul Barry Diller's People Inc announced on Monday its proposal to acquire MGM Resorts, valuing the casino operator at more than $18bn. The offer comes just weeks after Diller, the digital media company's chair, told shareholders in an April 28 letter that People would sharpen its focus on its MGM stake, calling the stock "wildly undervalued."
Details of the Offer
People currently owns 26.1% of MGM's outstanding common stock. It plans to bid $48.30 per share in cash for the remaining shares, representing a premium of about 10.6% over MGM's Friday closing price of $43.67. MGM shares rose more than 10% in premarket trading, while People's shares gained nearly 3%.
Background of Diller's Interest
Diller's interest in MGM dates back to the Covid-19 pandemic, when he began accumulating shares in the casino operator as its stock was battered by closures and travel restrictions. MGM owns marquee properties that account for roughly 40% of the Las Vegas Strip. However, the company has struggled with sluggish foot traffic in Las Vegas and has relied on growth in its China properties, including Macau, and digital operations. Its BetMGM venture has emerged as a leading US online sportsbook, providing exposure to a digital gambling market that analysts view favorably.
Strategic Shift for People Inc
For Diller, acquiring MGM represents a sharp departure from digital media, giving his group access to the travel and tourism industry amid volatile markets. The offer also marks another major takeover attempt in the casino sector. Last week, hospitality billionaire Tilman Fertitta's firm announced the takeover of Caesars Entertainment in a $17.6bn deal.
MGM Resorts did not immediately respond to a request for comment.
