Dive Brief:
- MGM Resorts confirmed that it received a go-private offer from Barry Diller-owned media conglomerate People Incorporated on Monday, per a release from the hotel operator.
- The deal values MGM at more than $18 billion. Diller’s company, which already owns 26.1% of the company’s common stock, offered to acquire all outstanding common shares for $48.30 per share in cash, according to a release from People Inc.
- The offer represents a 24% premium over the stock’s value as of May 29. “We continue to believe the market materially undervalues the power and durability of MGM’s assets,” Diller said in a statement.
Dive Insight:
MGM said its board of directors, along with financial and legal advisors, was considering the offer.
“The Company cannot provide assurances that such proposal or any subsequent proposal will result in an agreement or a transaction being reached or, if so, as to the timing, price or other terms and conditions of any such agreement,” MGM said in a statement. “The Company remains focused on advancing its position as the world's premier gaming entertainment company.”
If the transaction is approved, People Inc. will own just over 50.1% of MGM. Diller’s company, previously called IAC, first invested in MGM in 2020, acquiring a 12% stake in the hospitality company. At the time, Diller said in a release that what first attracted his firm to MGM, apart from its hospitality business, “was an area that currently comprises a tiny portion of its revenue — online gaming.”
Meanwhile, in its first-quarter earnings for fiscal 2026, MGM posted a record net revenue of $4.5 billion, driven in part by growth at the company’s North America online sportsbook venture, BetMGM. In an April update, BetMGM revised its outlook to a FY 2026 net revenue of $2.9 to $3.1 billion, slightly down from its previous outlook of $3.1 to $3.2 billion.
Diller said on Monday that his company began investing in MGM “because we believed it represented a rare kind of business: one with real world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities. That conviction has only strengthened over time.”
In its offer, People Inc. said MGM's assets and businesses “are not currently realizing their full potential in the public markets and that it will be difficult to correct this situation in MGM's current form as a public company.”
However, CEO Bill Hornbuckle was optimistic on his April call with analysts, and touted a quarterly year-over-year revenue uptick in Las Vegas — its first increase for the region since Q3 2024.
“Our optimism across all various business segments continues to hold firm, especially in Las Vegas,” Horbuckle said. “We remain on track for growth this year.”
Nonetheless, Diller’s offer may appeal to shareholders looking for an instant influx of capital.
“This transaction would deliver significant benefits to the shareholders of both companies,” Diller said on Monday. “MGM shareholders would be given the opportunity to de-risk their investment and realize immediate, attractive value in cash for their shares.”
The MGM offer comes less than a week after Fertitta Entertainment announced its acquisition of Caesars Entertainment in a deal valued at $17.6 billion. While that deal received board approval, the agreement included a “go-shop” stipulation that allows Caesars to solicit other bids through July 11, as well as negotiate alternative acquisition proposals
