TLDR
- People Inc has withdrawn its proposal to buy MGM Resorts and take the gaming company private.
- The June 1 offer was $48.30 per share, 27.6% above MGM Resorts’ Wednesday closing price of $37.85.
- The deal valued MGM Resorts at more than $18 billion after about four months of talks.
- People Inc will keep its 66.8 million shares, about 27% of MGM Resorts.
- MGM Resorts’ board says it will focus on Las Vegas, BetMGM, MGM China and the MGM Osaka resort set to open in 2030.
MGM Resorts International will remain a public company. Conglomerate People Inc has withdrawn its proposal to buy all public shares of the gaming group and take it private.
The decision ends talks that lasted about four months. According to Reuters and other business publications, the deal valued MGM Resorts at more than $18 billion.
Offer Price Well Above Current Shares
People Inc made its buyout offer on June 1. The proposal offered $48.30 per share for MGM Resorts stock.
The June offer was 27.6% above the company’s closing price on Wednesday. With the offer withdrawn, shareholders will not receive that premium.
Barry Diller, chairman and senior executive of People Inc, explained the decision. He said many ingredients go into a proposal of this kind before it is completed.
Diller added that People Inc did not feel the mix was coming together the way it had hoped. As a result, the company decided not to pursue taking MGM Resorts private at this time.
Board Backs Independent Future
Paul Salem, chairman of MGM Resorts, released a statement on Wednesday. He said the board is eager to continue leading the company as an independent business.
The statement followed months of talks by a special board committee. The committee’s goal was to serve the interests of MGM Resorts stockholders.
Salem pointed to several strengths. These include the company’s leadership in the Las Vegas market, its regional properties, and the progress of its online gaming business, BetMGM.
He also cited the group’s international portfolio. This includes MGM China in Macau and the upcoming MGM Osaka resort in Japan.
The MGM Osaka project is being developed with local partners. It is expected to cost 1.51 trillion yen, or about $9.54 billion, and is scheduled to open in 2030.
People Inc is not selling its position in MGM Resorts. Diller said the conglomerate still owns 66.8 million shares, or about 27% of the company.
He said People Inc has total confidence in MGM Resorts’ management and the company’s prospects. He also thanked the special committee and all MGM directors for their time and consideration.
Diller said People Inc itself is doing well. He noted that its main publishing business has posted its 11th quarter of growth.
He added that People Inc has plenty of cash to invest in its business and to buy its own stock.
MGM Resorts will now continue as a standalone public company. Its shares closed at $37.85 in US trading on Wednesday, well below the $48.30 People Inc had offered.
