Barry Diller’s People Inc. Makes $18 Billion Bid for MGM Resorts

Bold move: People Inc. has made submitted an offer worth roughly $18 billion in an attempt to take control of MGM Resorts International by acquiring the casino operator outright.

The company, formerly known as IAC, and currently owned by Barry Diller, announced on Monday, June 1, that it has proposed buying all outstanding MGM shares it does not already own for $48.30 per share in cash. 

At the moment, People Inc. holds a 26.1% stake in MGM, which makes it the company’s largest shareholder.

“The Market Undervalues the Power of MGM”

The offer comes just days after billionaire Tilman Fertitta‘s companies reached an agreement to acquire Caesars Entertainment, fueling speculation that a new wave of consolidation could be emerging across the gaming industry.

According to the New York Times, it is still ““unclear whether a bid by People Inc. for MGM Resorts would put the casino operator in play,” attracting more suitors. However, the current stake “could serve as a substantial blocking position against rivals.”

In a statement that accompanied the proposal, Diller explained that his confidence in MGM has only went up since People Inc. first invested in the company nearly six years ago. 

He went on to describe MGM as a business with valuable physical assets as well as significant digital growth potential that, in his view, continues to be undervalued by the market.

“We continue to believe the market materially undervalues the power and durability of MGM’s assets,” Diller said.

Under the proposal, MGM would become a privately held company controlled by People Inc., while existing management would largely remain in place. 

The deal would be financed through a combination of available cash, debt financing and additional equity commitments from investors.

Renewed Interest in Mergers

Analysts generally viewed the announcement positively, though many questioned whether MGM’s board would be willing to engage at the proposed valuation.

David Katz of Jefferies said the bid should be seen as a positive development for MGM and other gaming companies, particularly after the Caesars transaction renewed interest in merger activity across the sector. 

However, he noted that MGM management has repeatedly argued that the company’s shares are worth substantially more than their current market value.

Other voices pointed out that MGM’s ownership of the BetMGM sports betting venture could complicate any potential transaction. 

The future structure of the business would likely become a major discussion point if negotiations advance.

MGM confirmed it had received the proposal and said its board, together with financial and legal advisers, would carefully review the offer to determine what is in the best interests of shareholders.

For now, shareholders are not being asked to take any action. MGM also stressed that there is no guarantee discussions will lead to a final agreement.