Barry Diller's People Incorporated has made a non-binding offer to acquire the shares of MGM Resorts International (MGM) it doesn't already own, proposing $48.30 per share in cash. The bid values the casino operator at more than $18 billion, including debt, and could take one of the largest players on the Las Vegas Strip private.
The proposal represents a 10.6% premium over MGM's last closing price and a 24.1% premium over its 30-day average trading price. MGM shares surged 13% in midmorning New York trading to $49.35, exceeding the offer price, signaling that some investors anticipate a higher bid or a competitive process.
People Incorporated, which already holds a 26.1% stake in MGM, is not an outside bidder. Diller serves as a director on MGM's board and has been a significant investor since 2020. He said the company's hard assets—real estate and physical casinos—are undervalued by the market and provide a hedge against the rapid changes in digital media.
The bid comes at a time of heightened dealmaking in the casino industry. Fertitta Entertainment recently agreed to acquire Caesars Entertainment in a $17.6 billion transaction, including debt, further consolidating ownership on the Strip. MGM's properties account for roughly 40% of Las Vegas Strip revenue, according to Reuters, and the company also holds significant operations in Macau and through its BetMGM online sports-betting venture.
MGM's financial performance provides both sides with ammunition for negotiations. The company reported record first-quarter consolidated revenue of $4.5 billion, up 4% year-over-year. However, its Las Vegas Strip segment saw adjusted EBITDAR fall 8%, while MGM China revenue rose 9% and MGM Digital revenue jumped 43%. CEO Bill Hornbuckle cited "signs of strength" from convention bookings and renovated rooms at MGM Grand Las Vegas.
Mizuho analyst Ben Chaiken, as reported by Barron's, said the proposal could set a "floor" under MGM's stock and initiate negotiations. He maintained an Outperform rating and a $59 price target, suggesting that improving Las Vegas traffic could support a valuation above the current offer. The stock trading above the bid price indicates that some investors see room for a higher offer or a more rigorous board review.
People Incorporated said it expects to fund any transaction with existing cash at both companies, plus debt and equity commitments. After a deal, People would own just over 50.1% of MGM's equity, with other investors holding minority stakes, and would control the business. Diller said he would recuse himself from MGM board deliberations regarding the proposal.
The offer is non-binding and subject to a definitive agreement, financing, and regulatory approvals from gaming authorities. People Incorporated said it has no intention of backing a sale to another buyer that would change control or meaningfully dilute its stake.
For MGM shareholders, the key question is whether $48.30 is a final clearing price or an opening bid. The stock's move above the offer suggests that some investors are betting on a higher outcome, though the path to a deal remains uncertain.
