Barry Diller's People offers $18B-plus takeover bid for MGM Resorts

Media mogul Barry Diller's People Inc. has made an offer to acquire MGM Resorts International in a deal valuing the casino operator at more than $18 billion. The proposal comes days after Tilman Fertitta's firm agreed to acquire Caesars Entertainment, signaling a new wave of consolidation across the U.S. casino industry.

People, formerly known as IAC, announced Monday that it has offered $48.30 per share in cash for the MGM shares it does not already own. The proposal represents a premium of approximately 10.6% over MGM's closing share price on Friday.

The company currently owns a 26.1% stake in MGM Resorts and said the transaction would result in People controlling just over 50.1% of the casino operator's equity, with other investors retaining minority holdings.

MGM confirmed it received the proposal and said its board of directors, together with financial and legal advisers, would evaluate the offer before determining its next steps.

The bid arrives amid growing merger and acquisition activity in the gaming sector. Last week, hospitality billionaire Tilman Fertitta announced a $17.6 billion deal to acquire Caesars, prompting analysts to speculate that further consolidation could follow.

"Following Fertitta's announced acquisition of CZR last week, our view remains that the transaction could act as a catalyst for incremental deal activity across the (casino) group," Jefferies analyst David Katz said.

Investors appeared to welcome the proposal. MGM shares jumped more than 14% on Monday, trading above the offer price, while shares of People declined slightly.

A long-term bet on MGM

Diller's interest in MGM dates back to the COVID-19 pandemic, when IAC began accumulating shares in the company as casino stocks were battered by travel restrictions and property closures.

The veteran media executive has repeatedly argued that MGM remains significantly undervalued despite owning some of the most recognizable gaming and hospitality assets in the world.

"We began investing in MGM nearly six years ago because we believed it represented a rare kind of business: one with real-world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities," Diller said in a statement. "That conviction has only strengthened over time."

In a shareholder letter published in April, Diller described MGM stock as "wildly undervalued" and signaled that People would increasingly focus on its investment in the casino operator.

The investment has already generated substantial gains for the company. People reported $34 million in unrealized gains from its MGM stake during the first quarter, compared with a loss of approximately $324 million during the same period a year earlier.

Las Vegas, Macau and BetMGM

MGM remains one of the largest gaming operators in the United States, with marquee properties that account for roughly 40% of the Las Vegas Strip. More than 87% of its U.S. casino and hotel portfolio is concentrated in Las Vegas, including approximately 37,000 hotel rooms, 9,168 slot machines and 723 gaming tables.

However, the operator has faced challenges in recent quarters as visitation to Las Vegas softened. Growth from its Macau operations and digital business has helped offset some of that pressure.

One of MGM's most valuable growth assets is BetMGM, its online betting and gaming joint venture, which has emerged as one of the leading sportsbook operators in the U.S. market. Analysts have increasingly highlighted the digital gambling segment as a key driver of future growth for major gaming companies.

For Diller, whose business empire has historically focused on media, publishing, internet and travel brands, the acquisition would represent a significant expansion into gaming and hospitality. His previous investments in travel included Expedia, which IAC acquired in 2002 before later spinning it off as a standalone company.

The proposed transaction now awaits review by MGM's board, which has not yet indicated whether it intends to engage in negotiations or pursue alternative options.