MGM Resorts International will remain an independent company after Barry Diller’s People Incorporated withdrew its proposal to acquire all outstanding shares it does not already own.
People Incorporated proposed in June to buy the remaining shares for $48.30 each and take MGM Resorts International private. The move followed People’s initial involvement with MGM Resorts in 2020, but the discussions ended after the company concluded that the elements of the transaction were not coming together as planned.
Diller said People Incorporated would not pursue a take-private deal “at this time”, while leaving open the possibility of a future strategic transaction with MGM Resorts International.
“We didn’t feel the mix was coming together in the way we had hoped,” Diller said. “There are lots of ingredients that go into a proposal of this kind on its way to completion. 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.”
He added that People Incorporated remained confident in MGM Resorts International’s prospects. The company continues to hold 66.8 million shares, representing approximately 27% of MGM Resorts International, and said it remained interested in considering “a range of alternatives”.
MGM Resorts to continue as a standalone company
A special committee of MGM Resorts International’s board had been negotiating with People Incorporated on behalf of shareholders. Following the withdrawal, the operator will continue independently.
Paul Salem, Chair of MGM Resorts International, said the board was “excited to continue to lead MGM Resorts as a standalone company”. He pointed to the company’s position in Las Vegas, its regional properties and the continued momentum of BetMGM as sources of shareholder value.
Salem also highlighted MGM China and the opportunity associated with MGM Osaka. In July, MGM Resorts International said the Japanese resort remained on track for an opening in 2030. Chief Executive Officer and President Bill Hornbuckle said at the time that the company’s future had “never looked brighter”.
Mixed operating picture and lower share price
MGM Resorts International’s second-quarter results showed growth in Las Vegas, digital operations and net income, alongside declines in regional operations and consolidated adjusted EBITDA. MGM China’s gaming revenue returned to first-quarter levels across the Macau market after the FIFA World Cup.
The group also operates BetMGM through its joint venture with Entain, runs LeoVegas across Europe and licenses the BetMGM brand in markets including Europe and Brazil.
MGM Resorts International’s share price fell to $37.85 on 23 September, compared with $43.69 on 24 August. The withdrawal leaves open the question of whether People Incorporated could return with another strategic proposal in the future.
