People Inc. has withdrawn its proposal to acquire the outstanding public shares of MGM Resorts International, ending months of negotiations over a transaction that would have taken the casino operator private.
People, formerly known as IAC and led by media executive Barry Diller, submitted its proposal on June 1. The company offered $48.30 per share in cash for the MGM Resorts shares it did not already own. The proposal valued the transaction at more than $18 billion.
MGM Resorts confirmed the withdrawal and said it will continue as a standalone company. MGM shares fell 8% in extended trading following the announcement, according to Reuters.
Months of talks end without a deal
MGM Resorts said a special committee of its Board participated in negotiations with People over the past several months in connection with the proposal.
People said it decided not to pursue the transaction at this time.
“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 open to a strategic transaction with MGM Resorts and will consider alternatives.
People reported that it continues to hold 66.8 million MGM Resorts shares, representing approximately 27% of the company.
MGM keeps its gaming portfolio intact
MGM Resorts owns properties that account for roughly 40% of the Las Vegas Strip. The company also has operations in China and digital operations through BetMGM.
MGM’s international portfolio includes MGM China, while MGM Osaka is part of the company’s development plans in Japan. MGM also cited continued momentum at BetMGM in its statement following the withdrawal.
“The Board remains excited to continue to lead MGM Resorts as a standalone company. Our leading position in Las Vegas, our best-in-class regional properties, and BetMGM’s continued momentum highlight the value we bring to our shareholders. In addition, our international portfolio of MGM China and the significant opportunity ahead with MGM Osaka support a clear path to increasing shareholder value,” said Paul Salem, Chairman of the MGM Resorts Board.
People keeps MGM strategic options open
People began building its stake in MGM in 2020, when the casino operator’s shares were affected by property closures and travel restrictions during the COVID-19 pandemic.
For Diller, the MGM investment provided an opportunity to diversify People beyond its media operations, which include publications such as People and Food & Wine.
The MGM investment also follows Diller’s earlier involvement in travel and leisure through Expedia. IAC acquired Expedia in 2002 before later spinning off the online travel company.
People’s withdrawal ends its current proposal to acquire MGM Resorts’ remaining public shares. People retains its approximately 27% stake and said it remains interested in considering a range of strategic alternatives involving MGM Resorts.