Barry Diller’s People Offers $18B Bid for MGM

Media mogul Barry Diller’s company, People Inc., has submitted an offer to acquire control of MGM Resorts, valuing the casino operator at more than $18 billion, including its existing debt. The proposal would see People Inc., formerly known as IAC, purchase the 73.9% of MGM it does not already own at $48.30 per share in cash. The offer represents a premium of roughly 10.6% above MGM’s closing price last Friday and about 30% above its 90-day average volume-weighted price.

Currently, People Inc. holds a 26.1% stake in MGM Resorts and occupies two seats on the casino operator’s board, including one held by Diller himself. He has confirmed that he would recuse himself from any board actions related to the proposed acquisition.

MGM Assets and Market Position

MGM, known for its flagship properties along the Las Vegas Strip including the Bellagio and Aria, has struggled in recent years with slowing foot traffic in Las Vegas. The company has increasingly relied on growth in its China assets, including Macau, and digital operations such as BetMGM. Analysts have praised BetMGM as one of the leading U.S. online sportsbooks, enhancing MGM’s exposure to the digital gambling market.

“We began investing in MGM nearly six years ago because we believed it represented a rare kind of business: one with real world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities,” Diller said, according to Reuters. He added, “That conviction has only strengthened over time.” In an April letter to shareholders, Diller described MGM Resorts as “wildly undervalued” and highlighted the company’s strong management team under CEO Bill Hornbuckle.

People Inc.’s bid follows a week after Tilman Fertitta’s company announced a $17.6 billion acquisition of Caesars Entertainment. Analysts see Diller’s offer as potentially catalyzing further consolidation within the U.S. casino industry. “Following Fertitta’s announced acquisition of CZR last week, our view remains that the transaction could act as a catalyst for incremental deal activity across the (casino) group,” said Jefferies analyst David Katz.

The announcement had an immediate effect on stock prices. Shares of MGM Resorts rose 14.5% to $50, trading above the offer price, while People Inc. shares fell slightly by 0.5%. People reported $34 million in unrealized gains from its MGM investment in the March quarter, a significant recovery from a loss of approximately $324 million a year earlier.

Diller’s Strategic Perspective

Diller has a long history of investments in the travel and leisure sector, including his acquisition of Expedia in 2002, which he developed into a global travel platform under IAC before spinning it off. His interest in MGM began during the COVID-19 pandemic when he accumulated a stake in the casino operator while shares were depressed due to closures and travel restrictions.

In his shareholder communications, Diller noted that MGM’s properties account for roughly 40% of the Las Vegas Strip, a concentration of premium resorts that he considers difficult to replicate. He views the combination of MGM’s physical and digital assets, alongside People Inc.’s media holdings, as a strategic opportunity to diversify and capitalize on growth within both hospitality and digital entertainment sectors.

The proposed deal is still subject to review by MGM’s board in consultation with legal and financial advisors. While the proposal could be adjusted or even withdrawn, it signals Diller’s continued commitment to expanding his holdings in the gaming and leisure market.