MGM Resorts Reportedly Weighs Takeover of People Inc., Reversing Roles in M&A Talks

MGM Resorts International (NYSE:MGM) is weighing a potential takeover bid for Barry Diller’s People Incorporated, a strategic reversal that comes just a day after People Inc. withdrew its own proposal to buy the casino giant. The potential offer could materialize in the coming days, according to a report from The Wall Street Journal citing people familiar with the matter.

Market Reaction and Strategic Rationale

The news prompted a sharp divergence in the companies' stock prices in after-hours trading. Shares of People Incorporated (NASDAQ:PPLI) surged 8.5% in extended trading on the buyout prospect. In contrast, MGM's stock had fallen nearly 11% during Thursday's regular session following the collapse of the original deal proposed by Diller, though it stabilized after hours.

For MGM, acquiring People Inc. could function as a complex but effective large-scale share buyback. People Inc. holds a 27% stake in MGM, worth approximately $2.5 billion. A takeover would allow MGM to reclaim those shares while also acquiring People Inc.'s portfolio of other assets at what analysts see as an attractive valuation.

Conglomerate Discount in Focus

Wall Street has noted that People Inc. trades at a significant conglomerate discount. The company's entire market capitalization of roughly $2.7 billion is nearly identical to the value of its MGM stake alone. This suggests that investors are assigning minimal value to its other holdings, which include:

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• Digital and print media properties like *People*, *Food & Wine*, and *Southern Living*.
• Stakes in The Daily Beast and the car-sharing platform Turo.

Background on the Bids

The potential MGM offer follows the termination of Diller's ambitious bid to acquire the gaming company. Diller had pursued a takeover of MGM since June, valuing it at approximately $12.4 billion. He framed the deal as a strategic hedge against artificial intelligence disruption by expanding into live entertainment and digital betting.

On Wednesday, Diller formally abandoned the effort, citing difficulty in assembling the right group of partners. However, he emphasized that People Inc. remained open to future strategic transactions with MGM, setting the stage for the current potential role reversal.