TLDR
- CreditSights says MGM China faces “event risk” if control of parent MGM Resorts changes hands.
- MGM Resorts and People Inc. amended a voting agreement that could make a third-party takeover easier.
- People Inc. controls about 26% of MGM Resorts shares and will now vote with the board on a change-of-control deal.
- CreditSights pointed to MGM China’s stronger market share and low leverage as a possible draw for buyers.
- MGM Resorts says it is not in deal talks with People Inc. or any other buyer.
MGM China could become a key part of any future sale of MGM Resorts International, according to research firm CreditSights. The firm said the Macau operator faces “event risk” if control of its parent company changes hands.
The comments follow a change to a voting agreement between MGM Resorts and People Inc., the media company led by Barry Diller. The revised deal could make it easier for the casino company to accept a takeover offer from a third party.
MGM Resorts, based in Las Vegas, owns 56% of MGM China. MGM China runs two casino resorts in Macau, MGM Cotai and MGM Macau.
What Changed in the Voting Agreement
People Inc. controls about 26% of MGM Resorts shares. Under the amended agreement, it will vote those shares “in accordance with the Board’s recommendation in connection with a change-of-control transaction.”
That is a shift from Diller’s earlier position. After People Inc. disclosed an $18 billion takeover bid for MGM Resorts, Diller said he would oppose bids from other parties.
The new terms could simplify a future sale of the casino operator. A buyer other than People Inc. would no longer face opposition from its largest shareholder if the board backs the deal.
MGM’s chairman said the agreement creates “a clear path to maximize value through share repurchases and a change of control (CoC) transaction, if applicable.”
CreditSights said it reads that statement as MGM leaving the door open to another potential buyer. The firm said this could come up again, especially if MGM’s stock price stays low.
Even so, CreditSights described the risk of a takeover hanging over the company as “less acute” than before.
Why MGM China Could Attract Buyers
CreditSights said MGM China’s recent business results could appeal to anyone looking to buy MGM Resorts. It pointed to “decent 3Q26 results with a stronger market share.”
The firm also said MGM China’s leverage remains well below pre-pandemic levels. Leverage measures how much debt a company carries compared with its earnings.
A sale of the parent company could create uncertainty for MGM China. But the report said it could also lead to a good outcome or more clarity for the Macau business.
Soon after Diller made his takeover offer, unconfirmed reports said he wanted to sell MGM’s stake in MGM China. The same reports said he also wanted to sell the company’s interest in MGM Osaka in Japan.
For now, no transaction is on the table. MGM has made clear it is not holding talks with People Inc. about a deal.
The company has also not said it is in discussions with any other possible buyer.
