People Inc. has officially retracted its offer to purchase the remaining public shares of MGM Resorts International, concluding months of discussions that aimed to transition the casino operator into a private entity.
The proposal, initially submitted on June 1, included a cash offer of $48.30 per share for the MGM Resorts stock that People did not already possess, valuing the deal at over $18 billion.
MGM Resorts acknowledged the withdrawal and confirmed its intention to continue operating as an independent company. Following the announcement, MGM shares experienced an 8% decline in after-hours trading, as reported by Reuters.
A special committee from MGM's Board had been involved in the negotiations with People throughout the past several months regarding this proposal.
People stated that it opted against pursuing the transaction at this point, with Barry Diller, the company’s leader, mentioning, “We didn't feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time.”
Despite this setback, People expressed its openness to exploring strategic partnerships with MGM Resorts and will evaluate other options moving forward.
Currently, People holds approximately 66.8 million shares of MGM Resorts, which represents about 27% of the company.
MGM Resorts manages properties that make up nearly 40% of the Las Vegas Strip and has operations in China, in addition to its digital platform, BetMGM.
The international portfolio of MGM includes MGM China, and the company is also planning developments in Japan with MGM Osaka. MGM highlighted the ongoing growth of BetMGM in its statement following the withdrawal.
Paul Salem, Chairman of the MGM Resorts Board, stated, “The Board remains excited to continue to lead MGM Resorts as a standalone company. Our leading position in Las Vegas, our best-in-class regional properties, and BetMGM's continued momentum highlight the value we bring to our shareholders. Furthermore, our international portfolio of MGM China and the significant opportunity ahead with MGM Osaka support a clear path to increasing shareholder value.”
People began increasing its stake in MGM in 2020, during a time when the casino operator's shares were negatively impacted by property closures and travel restrictions due to the COVID-19 pandemic.
For Diller, investing in MGM represented a chance to diversify People’s interests beyond its media operations, which encompass publications like People and Food & Wine.
This investment also follows Diller's previous experiences in the travel and leisure sector through Expedia, which IAC acquired in 2002 before later spinning off.
People's withdrawal marks the end of its current attempt to acquire the remaining public shares of MGM Resorts, although it retains its significant 27% stake and remains interested in exploring various strategic alternatives involving MGM Resorts.