Barry Diller's business entity, People, is preparing an offer to acquire the casino giant MGM Resorts International, in a deal that would value the company at over $18 billion.
The acquisition plan is still in the final stages of being finalized and could be delayed or terminated. If the transaction proceeds, it would mark another major strategic shift for Diller following the restructuring of the former IAC group.
People plans to acquire the remaining 73.9% stake in MGM Resorts International with a cash offer of $48.30 per share.
This bid represents a premium of nearly 10.6% over MGM Resorts' closing price last Friday and is 30% higher than its volume-weighted average price over the past 90 days.
MGM Resorts International is already a significant asset for People. Diller's enterprises currently hold a 26.1% stake in the company and occupy two seats on its board of directors, one of which is held by Diller himself.
Apart from MGM, People's core operations also include a major digital media segment, with its namesake magazine being a key component. Over the past year, the former IAC group has divested several businesses, including the home services platform Angi and the caregiving website Care.com.
It remains uncertain whether this acquisition offer will trigger competing bids from other investors. However, People's existing shareholding provides a strong defensive barrier against potential rival interventions.
Diller's rationale for betting on MGM
In a letter to shareholders this past April, Diller offered this assessment of MGM Resorts International:
MGM Resorts International possesses exceptional strength, with a portfolio of landmark resort destinations, a scalable digital platform, premium brands, and a continuously expanding global footprint. Under the leadership of CEO Bill Hornbuckle, the company also boasts a top-tier management team. MGM owns 40% of the properties on the Las Vegas Strip, an entertainment core that is globally irreplicable.
Diller wrote that in today's volatile and fast-paced market environment, MGM's tangible assets paired with People's digital media business create an excellent risk-hedging combination.
Year-to-date, MGM Resorts International's stock price has risen over 19%. Analysts believe the company's performance is poised for continued improvement as Las Vegas's tourism and entertainment industry recovers.
Diller has been bullish on MGM for years, initially building a position during the pandemic lockdowns in 2020. The business magnate has long been involved in the travel and leisure sector: following the 9/11 attacks, he acquired the online travel platform Expedia and later spun it off independently in 2005, an investment that became one of the most successful of his career.
Today, MGM also faces new challenges. While its online betting business, BetMGM, has achieved profitable growth, it must compete directly with online sportsbooks like DraftKings and FanDuel. Simultaneously, the rising popularity of prediction market platforms such as Kalshi and Polymarket is also drawing users away from traditional sports betting.