Here’s a twist we didn’t see coming: People’s proposed buyout of MGM Resorts fell through. However, recent developments indicate potential takeover talks involving the companies may have completely flipped. In the same week that Barry Diller’s People Inc rescinded an $18 billion offer to acquire the remaining shares in MGM that it does not already own, reports have surfaced that the tables could be turning. Sources close to the matter suggest that MGM may now be considering a takeover bid for People Inc instead.
From a market perspective, the rescinded offer and the potential shift in dynamics have proven favourable to People Inc, pushing its shares up 10% on the week. Conversely, MGM Resorts has seen its stock price decline by almost 15% during that same span. Diller began investing in the gaming and hospitality company in 2020, and his current 27% stake carries a value comparable to People Inc and its $3 billion market capitalisation. In a statement confirming the termination of the acquisition talks, Diller noted that the ingredients of the proposed deal were not coming together as anticipated.
Despite walking away from the current transaction, Diller expressed total confidence in MGM and added that People Inc remains open to the possibility of a future strategic deal. Representatives for People Inc declined to comment on the new reports, while MGM did not immediately respond to requests for official statements.
Diller had originally coveted the physical assets of MGM to diversify holdings and guard against potential disruptions from artificial intelligence across media and publishing assets. Market analysts remain largely bullish on MGM Resorts, suggesting that hurdles related to borrowing costs and complex regulatory approvals likely derailed the initial transaction rather than any fundamental operational issues within the company itself. Industry experts maintain positive ratings as the hospitality giant continues pursuing its independent strategic roadmap for growth and shareholder value.