MGM Resorts shares sink 9% after Barry Diller's People Inc. rescinds takeover offer
Barry Diller's People Inc. has rescinded its offer to buy the remaining public shares of MGM Resorts.
On Thursday, MGM Resorts' shares plummeted by 9% after media mogul Barry Diller's People Inc pulled its $18 billion bid to acquire the casino operator. The stock opened at $34.40, signaling a potential seven-month low, and erased all gains since the People initially announced the bid. People, which holds a 27% stake in MGM, had proposed purchasing the remaining shares for $48.30 each in June, pushing the company's stock to an 18-year high.
The deal aimed to broaden Diller's group's portfolio, which includes well-known brands like People magazine and Travel + Leisure. However, Diller stated they did not feel the merger was progressing as they had anticipated. This was the second take-private offer for a casino operator this year, following Tilman Fertitta's deal to buy out Caesars Entertainment in May.
Analysts believed that MGM Resorts could potentially perform better under People's less short-term focused investor scrutiny. Despite People's stock falling by a fifth since the initial proposal, its shares remained relatively unchanged before trading began. MGM owns significant Las Vegas Strip properties, representing about 40% of the strip's total.
However, the company's growth has been inconsistent, with domestic foot traffic declining while its digital operations and Chinese assets have thrived. MGM's stock is currently rated as a "hold" on average, on par with its peer Caesars, while smaller competitors Las Vegas Sands and Wynn Resorts have a "buy" rating.
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