MGM Resorts International, United States-based parent of Macau casino operator MGM China Holdings Ltd, confirmed on Monday it had received an offer that day from People Inc, a media and Internet conglomerate, to acquire all of the outstanding shares of MGM Resorts that it does not already own, for US$48.30 per share in cash.
People Inc, formerly known as IAC Inc, is led by U.S. billionaire businessman Barry Diller.
MGM Resorts stated: “The company’s board of directors, in consultation with its financial and legal advisors, will carefully review and consider the proposal to determine the course of action that it believes is in the best interests of the company and all of its shareholders.”.
“MGM Resorts shareholders do not need to take any action at this time,” it added.
As of Monday, People Inc owned 26.1 percent of the outstanding common stock of MGM Resorts, according to a press release that day by People Inc.
The offer is said to value MGM Resorts at more than US$18 billion, including circa US$6.40 billion in net debt.
The proposal “represents a premium of 24.1 percent to the volume-weighted average price of MGM [Resorts] common stock for the 30 trading days ending on May 29, 2026, a more than 30-percent premium to the stock’s volume-weighted average price for the 90 trading days ending on the same date, and a 10.6-percent premium to the most recent closing price,” according to People Inc.
In Monday’s announcement, People Inc said it expects to fund any transaction involving MGM Resorts “with a combination of existing cash on hand… and additional debt and equity funding commitments”.
People Inc also said it anticipates owning “just over 50.1 percent” of the equity of MGM Resorts, “with other investors, which may include existing shareholders of MGM, holding minority interests”.
“We expect MGM’s current management team would continue to lead the business and would seek to discuss suitable terms with the relevant individuals at the appropriate point in the process,” it added.
Mr Diller, who serves as chairman of People Inc, is currently a member of MGM Resorts’ board. He said he would recuse himself “from any deliberations of the MGM board regarding this transaction or any alternative”.
Monday’s release cited Mr Diller as saying that his group began investing in MGM Resorts “nearly six years ago” because it believed the casino firm “represented a rare kind of business: one with real world assets… and exceptional digital growth opportunities”.
Valuation estimates
“That conviction has only strengthened over time,” Mr Diller stated. “We continue to believe the market materially undervalues the power and durability of MGM’s assets.”
He added: “We believe MGM’s management team is superb, and that there is a compelling opportunity to support MGM’s next phase of growth and help unlock its full value.”
A Monday note from Daniel Politzer, Samuel Nielsen and Michael Hirsh at JP Morgan Securities LLC, said the price proposed might be a “starting point”.
The analysts stated: “The US$48.30 per share offer is just 11 percent above Friday’s close and likely gives minimal valuation credit for longer-duration value drivers (e.g., Japan, digital EBITDA inflection), thus we think this could be a starting point for negotiations.” They were referring latterly to the outlook for MGM Resorts’ earnings before interest, taxation, depreciation and amortisation (EBITDA).
Aside from its majority interest in MGM China, MGM Resorts is also developing – with Japan’s Orix Corp – the JPY1.51-trillion (US$9.45-billion currently) MGM Osaka casino complex, due to open in 2030.
JP Morgan also made reference in its Monday note, to last Thursday’s all-cash US$31.00-per-share takeover offer of Fertitta Entertainment Inc – controlled by Wynn Resorts Ltd’s largest individual shareholder, Tilman Fertitta – for U.S. casino operator Caesars Entertainment Inc.
“We’re encouraged that longer duration investors are stepping up to capitalise on U.S. gaming firms’ attractive intrinsic cash flow generation, especially following several years where the stocks have traded solely on earnings momentum,” said the bank.
