MGM Resorts May Flip the Script on Barry Diller with Rumored People Bid

MGM Resorts International is weighing a possible bid for People Incorporated a day after the media company pulled its offer for the casino operator. MGM Eyes People Acquisition After Media Firm Drops MGM Bid MGM could make a bid for People in the coming days, according to people familiar with the matter. The proposed deal is particularly surprising as People owns around 27% of MGM, reported The Wall Street Journal. The media company built most of that position in 2020 when MGM shares tumbled during the COVID-19 pandemic. Today that stake is worth about $2.5 billion. The figure is near People’s total market valuation, which was about $2.7 billion at the time of the report. For MGM, buying People could be a way to take back control of a large amount of its own stock. The deal also could give MGM a window into other investments and businesses of People. People owns several popular publishing brands, including Food & Wine, People and Southern Living. It also invests in companies such as Turo and owns stakes in the Daily Beast. After an acquisition, MGM could then sell some of those assets. Using this strategy, the casino operator can generate further cash while retaining those assets it considers to be useful. The possible deal surfaced shortly after People pulled its offer to buy MGM. In June, Diller’s company offered $48.30 per MGM share in cash, putting a $12.4 billion value on the casino operator. People Stock Rises 9% After MGM Bid Report People already owns a stake in MGM, so the idea was to buy the rest of the shares on the public market. The company, however, called off the effort on Wednesday, unable to put together the necessary transaction structure and financing. However, Diller said People could still make a strategic deal with MGM. That position could leave room for negotiations over a possible acquisition in the reverse direction. News of MGM’s interest was met with a swift market response. After hours, People shares were up about 9% while MGM fell more than 10% in Thursday’s regular session after People withdrew its takeover proposal. The company earlier this year changed its corporate name from IAC as it looked to narrow its portfolio. The company has been trimming its businesses outside its core publishing and MGM investment. Major MGM properties include Bellagio and other Las Vegas properties. Its business also includes casinos outside the US and online gambling through BetMGM. MGM representatives declined to comment on the reported talks. For now, any deal remains uncertain. However, if MGM presses on, the potential transaction would see the companies change hands just days after Diller tried to take control of the casino giant.