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People Inc. has abandoned its plan to take MGM Resorts International private, but Barry Diller remains heavily invested in the casino operator and has left future deal options open.
People withdrew the proposal on September 23 after several months of talks with a special committee of the MGM Resorts Board. The $48.30 per share cash offer valued the transaction at more than $18 billion.
Good to Know
- People still owns 66.8 million MGM Resorts shares, equal to about 27% of the company.
- MGM shares fell about 11% on September 24 after the takeover proposal disappeared.
- Reuters reported a day later that MGM Resorts was discussing a possible bid for People Inc.
People Keeps Major MGM Resorts Stake
Diller gave no single reason for abandoning the MGM Resorts acquisition.
“We didn’t feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time,” Diller said.
People said it remains interested in a possible strategic transaction involving MGM Resorts. Its 27% holding also keeps the former IAC closely tied to the casino company.
People began buying MGM stock in 2020, when casino closures and travel restrictions weighed heavily on the gaming sector. The investment also gave the media group exposure beyond brands such as People and Food & Wine.
MGM Resorts will meanwhile continue operating as a standalone company. Its portfolio includes a large Las Vegas Strip presence, regional casinos, MGM China, BetMGM and the MGM Osaka development in Japan.
Digital operations and Macau have provided stronger areas of performance while Las Vegas visitor trends have remained uneven. MGM properties account for roughly 40% of the Las Vegas Strip.
Deal Story Takes Another Turn
The end of the People proposal may not close the corporate discussions between the two companies.
Reuters reported on September 24, citing The Wall Street Journal, that MGM Resorts was discussing a possible acquisition of People Inc. People shares rose about 9% in extended trading following that report.
No agreement has been announced, and MGM has not completed any transaction involving People.
The reversal comes after investors had already become less confident that the original $48.30 MGM proposal would close. MGM shares had fallen 27% from an 18 year high reached after the June offer before People formally withdrew it.
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