MGM Acquisition Bid Fails
Barry Diller's People Inc. Withdraws $18 Billion Bid to Acquire MGM Resorts
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Key Points
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People Inc.’s proposed financing structure was expected to combine its cash on hand, new borrowings and capital from additional investors, making the transaction unusually complex because of the minority stake involved.
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Barry Diller had previously described MGM as a rare business with physical assets that artificial intelligence could not easily replicate or disintermediate, alongside significant digital-growth opportunities.
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Diller said People Inc.’s core publishing business had posted its 11th consecutive quarter of growth and that the company had sufficient cash both to invest in the business and repurchase its own shares.
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MGM’s board had created a special committee and hired advisers to evaluate Diller’s proposal before the bid was withdrawn.
Barry Diller's People Inc. has withdrawn its $18 billion proposal to take MGM Resorts International private after negotiations hit a wall on financing and deal structure. RTTNews reported that MGM stock fell around 10% in after-hours trading following the announcement. The offer, valued at $48.30 per share in cash, would have let People Inc. buy the roughly 73% of MGM it doesn't already own, giving it full control of the casino giant.
Diller said the deal's "mix was not coming together in the way we had hoped," but emphasized People Inc. remains bullish on MGM's future. TradingView noted MGM shares plunged 11% after-hours as the bid collapsed. MGM's board, which had formed a special committee to review the offer, said it's committed to operating independently and pursuing growth through its Las Vegas properties, regional casinos, BetMGM, and a major resort project in Japan.
A Complex Deal That Never Found Its Footing
The proposal faced an unusual financing puzzle. People Inc. already owned about 26% of MGM (roughly 66.8 million shares), so buying the rest required combining cash on hand, new borrowing, and money from outside investors. That layered structure made the deal harder to close than a typical takeover. RTTNews reported that securing additional equity financing proved difficult as market conditions tightened.
MGM's Board Rejected the Price as Too Low
MGM's special committee, hired to evaluate Diller's bid, apparently viewed the $48.30-per-share offer as undervaluing the company. The offer represented a 24% premium over MGM's recent trading price, yet the board still wanted more. MGM's chairman Paul Salem said the board is "excited to continue to lead MGM Resorts as a standalone company," signaling confidence in the company's independent future.
MGM Pins Growth Hopes on Japan and Digital Gaming
Now operating independently, MGM is focusing on its international footprint and digital reach. The company is developing MGM Osaka, a $10 billion integrated resort in Japan, and expanding BetMGM's online sports betting platform. MGM also operates its gaming business in China and maintains a strong presence on the Las Vegas Strip and at regional casinos across the United States.
Diller Keeps the Door Open for Future Deals
Despite walking away from the acquisition, Diller signaled that People Inc. may explore other strategic options with MGM — such as asset swaps or joint ventures — in the future. He noted that People Inc.'s core publishing business has posted 11 straight quarters of growth and has ample cash to invest and buy back its own shares. TradingView reported that People Inc. stock actually rose 4% on the withdrawal news, suggesting investors approved of Diller's capital allocation decision.
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