Barry Diller’s People Inc. Withdraws $18B MGM Resorts Proposal, Triggering 11% Stock Plunge
In a surprising turn of events that jolted Wall Street, Barry Diller’s media company, People Inc. (formerly IAC), officially retracted its $18 billion proposal to privatize MGM Resorts International on Wednesday, September 24. This decision led to a nearly 11% drop in MGM shares in a single trading session.
People Inc., currently holding a significant 26.1% stake in the Las Vegas-based casino behemoth, had proposed a cash offer of $48.30 per share in June. This offer valued MGM Resorts at over $18 billion. However, after several months of negotiations, Diller decided to abandon the deal, attributing this to the transaction’s complexity. “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 expressed in a statement.
As reported by CNBC, the considerable debt burden of the deal played a crucial role in the decision. Bloomberg also revealed that Diller faced challenges in securing the additional equity required to finance the complex transaction. Despite stepping back, Diller left the possibility of future negotiations open, stating that People Inc. remains “open to and interested in the possibility of a strategic transaction with MGM Resorts.”
MGM Resorts confirmed the withdrawal and announced its continuation as a standalone public company. The casino operator owns 30 hotel and casino destinations worldwide, including properties that account for approximately 40% of the Las Vegas Strip, and holds a 50% stake in the sports betting platform, BetMGM.
Source: CNBC – MGM Resorts shares sink after Barry Diller’s People Inc. rescinds takeover offer