Diller’s People Inc walked away from its own MGM bid about a month ago.
The hit
MGM Resorts has amended its voting agreement with Barry Diller’s People Inc, potentially letting Diller approve a takeover bid from another company, according to Casino.org. The April deal had Diller & other “covered entities” limit their voting influence at MGM. In the wake of People’s acquisition offer for MGM, Diller made clear People wouldn’t support another third-party bid. The new agreement alters that stance. MGM says no transaction is contemplated & has not said it is in talks with another suitor.
Why it matters
Diller’s People Inc is MGM’s largest shareholder, holding over 26% of the stock, so his vote carries real weight in any takeover fight. The new pact also stops MGM deploying defensive measures against People while it complies with the agreement.
The record
| People Inc’s prior bid for MGM | $18bn (dropped) |
|---|---|
| People Inc’s initial MGM stake | 12% (August 2020) |
| Ownership cap under new deal | 29.9% of MGM’s outstanding shares |
| MGM share price | down 22.6% year-to-date |
What happens next
Watch for any formal takeover approach for MGM, or further moves by People Inc toward the ownership ceiling set under the amended agreement.
Sources: MGM Alters Diller Voting Agreement, Door Open for Him to Approve Third-Party Takeover
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