Barry Diller's People Inc Withdraws MGM Resorts Bid, Sending Shares Down 9%

Deep News
09/25

Key points: Barry Diller's People Inc. has withdrawn its offer to acquire MGM Resorts. The company, which already holds a 26.1% stake in the gaming giant, proposed buying the remaining outstanding shares in June. Diller indicated that a deal could still be considered in the future.

MGM Resorts shares fell 9% on Thursday after Barry Diller's People Inc. (formerly IAC Group) pulled its proposal to acquire the casino giant. Four months ago, Diller's company offered $48.30 per share to buy MGM. People Inc. currently holds roughly a 26.1% equity stake in MGM.

Diller, chairman of People Inc., attributed the decision to withdraw the acquisition to the complexity of the transaction itself. "There are numerous conditions that must be met to complete an acquisition proposal of this kind. We believe those conditions cannot be satisfied as expected, so we have decided not to move forward at this stage with the plan to take the company private," Diller said in a press release. Media reported on Thursday that Diller abandoned the acquisition partly because the deal would place a massive debt burden on the company. Even so, Diller said he remains willing to consider future deal opportunities.

"We at People Inc. remain open to and interested in reaching a strategic transaction with MGM Resorts, and we look forward to evaluating various alternatives," he said in the announcement. Earlier this week, Caesars Entertainment shareholders approved billionaire Tilman Fertitta's acquisition proposal, with the deal totaling $17.6 billion. Caesars Entertainment shareholders will receive $31 per share in cash.

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