MGM Resorts shares tumble after Diller’s People withdraws $18 billion bid

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.