MGM eyes bid for People Inc., its own top shareholder
The move comes barely 24 hours after Diller’s company dropped its offer for MGM.
The hit
MGM Resorts is reportedly weighing a takeover of People Inc. — the media company that tried to buy MGM & remains its biggest shareholder, according to Casino.org. MGM is considering the move after Barry Diller’s firm pulled its acquisition offer for MGM, according to the Wall Street Journal. MGM shares dipped slightly after hours while People jumped 9.13%.
Why it matters
According to the Journal, MGM could be motivated to get its hands on the equity People controls. People owns approximately 27% of MGM, & MGM has long been aggressive in buying back its shares, so acquiring People could let it retire a big chunk of its float, potentially at a favourable valuation, according to Casino.org. People also owns The Daily Beast, a healthcare staffing firm & a stake in Turo, assets MGM could later sell to raise cash.
The record
| MGM market cap | $9.52bn (Casino.org) |
|---|---|
| People’s stake in MGM | approximately 27%, worth $2.57bn |
| People Inc. market cap | $2.68bn |
| Diller’s dropped MGM offer | $48.30 per share |
| Turo private valuation | $1.1bn to $1.3bn, minority stake held by People |
What happens next
No formal MGM bid has emerged. Watch for confirmation of talks or a filing, & whether Diller’s “strategic” comments translate into a deal.
Sources: Tables Turned: MGM May Swoop In with Bid for Diller’s People
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