Story
MGM Resorts Reportedly Weighs Bid for Largest Shareholder People Inc.
Summary
Casino operator MGM Resorts International is discussing a potential bid for People Inc., according to a Wall Street Journal report, a surprising move that comes just one day after People Inc. withdrew its own offer for MGM.
MGM Resorts International is discussing making a bid to acquire People Inc., the media and internet company controlled by Barry Diller, according to a Wall Street Journal report published Thursday. The potential offer represents an unexpected strategic pivot by the casino and hospitality giant.
An Unexpected Turn
The development is a significant reversal of roles between the two companies. It comes just one day after People Inc. formally withdrew its own proposal to purchase MGM Resorts. Citing people familiar with the matter, the Journal reported that if MGM decides to move forward, a formal proposal could be made in the coming days.
People Inc., formerly known as IAC, is MGM's largest shareholder. The company began accumulating its position in 2020, capitalizing on the depressed price of MGM shares during the COVID-19 pandemic, which heavily impacted the travel and casino industries.
AdMarket Reaction and Background
Following the news, shares of New York-based People Inc. rose 9% in after-hours trading. The potential acquisition would see MGM attempt to buy the company that has been its most significant investor for several years.
People Inc.'s stake in MGM currently stands at around 27%. According to the Journal's analysis, the value of this holding is roughly equivalent to People Inc.'s own market capitalization. MGM did not immediately respond to a request for comment, while a representative for People Inc. declined to comment on the report.
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