MGM Resorts, People Inc agreed on takeover price before bid collapse: MGM CEO

Casino group MGM Resorts International and its largest shareholder, People Inc, had reached an agreement on the price of a proposed takeover before the latter withdrew its offer, according to MGM Resorts’ president and chief executive, Bill Hornbuckle. Speaking during the Wednesday conference call to discuss the casino group’s third-quarter results, Mr Hornbuckle said People Inc had been unable to assemble an investor syndicate to proceed with the proposed acquisition. “People [Inc] and the MGM Resorts special committee came to terms on price, but in the end, People [Inc] was unable to assemble a syndicate that met their objective and then withdrew their offer,” he stated. MGM Resorts is the parent of Macau casino operator MGM China Holdings Ltd, and is also involved in developing an integrated resort in Osaka, Japan. Mr Hornbuckle’s comments followed an announcement on Wednesday that MGM Resorts and People Inc had amended their existing voting agreement, subsequent to the withdrawal of the takeover proposal. The takeover had been tabled in June. Under the revised agreement, People Inc, Barry Diller and certain associated parties have agreed, subject to certain conditions, to vote all their MGM Resorts shares in accordance with the recommendations of the casino group’s board of directors in connection with any change-of-control transaction. The agreement also prevents those parties from acquiring additional MGM Resorts shares if doing so would result in their combined ownership exceeding 29.9 percent of the casino firm’s outstanding shares. In return, MGM Resorts has agreed not to implement defensive measures or take actions designed to be adverse to those shareholders, provided those shareholders remain in compliance with the agreement. Mr Hornbuckle said the amended arrangement aligned the company’s largest shareholder with MGM Resorts’ long-term strategy and its commitment to maximising value for all shareholders. “The discussion between MGM and People [Inc] ends there,” the CEO added, indicating that management remained focused on the group’s business. In Wednesday’s announcement, MGM Resorts chairman Paul Salem said the amended agreement with People Inc provided the board with a clear path to maximise shareholder value through share repurchases and a potential change-of-control transaction, in accordance with its fiduciary duties. “We value People [Inc], our largest shareholder, and Barry Diller, an MGM Resorts director, both of whom will continue to help maximise value for all shareholders,” Mr Salem stated. MGM Resorts stressed that the revised agreement did not oblige either party to pursue or enter into any transaction, and that no such transaction was currently contemplated.