MGM Resorts weighs potential takeover bid for Barry Diller’s People Inc., WSJ says

MGM Resorts International (MGM) is reportedly considering a potential takeover bid for Barry Diller's People Incorporated, according to a Wall Street Journal report citing sources familiar with the situation. The proposed offer, which could be announced in the coming days, comes after People withdrew its own attempt to buy MGM just one day earlier.

As a result, MGM's shares experienced a nearly 11% drop during regular trading on Thursday; however, they stabilized slightly after the market closed, declining by only 0.3% in extended hours. In contrast, People's stock surged by 8.5% in after-hours trading, as investors welcomed the possibility of a buyout from MGM.

With a market capitalization of approximately $2.7 billion, People Incorporated trails MGM's $8.5 billion valuation. Analysts have noted that the nearly identical value between People's total market cap and its stake in MGM suggests a significant discount in equity markets, as People's publishing titles and secondary investments are not highly valued.

People Incorporated owns a range of high-profile digital and print media properties, including People magazine, Food & Wine, and Southern Living, along with stakes in the Daily Beast and car-sharing company Turo.

Barry Diller, the founder of People Incorporated, had previously attempted to acquire MGM in June, valuing the gaming company at around $12.4 billion. Diller presented the deal as a strategic response to potential disruption from artificial intelligence, emphasizing MGM's strategic focus on live entertainment and digital betting.

However, Diller abandoned the acquisition on Wednesday, citing challenges in assembling a suitable partner group while stating that People remains open to potential strategic transactions with MGM.