Transaction Overview

MGM Resorts International announced on Monday that it has confirmed receiving a privatization acquisition offer from People Incorporated, a media group controlled by Barry Diller. The offer values MGM at over $18 billion in total.

According to a press release from People Inc., the company proposed acquiring all outstanding common shares of MGM at a cash price of $48.30 per share. People Inc. currently holds 26.1% of MGM's common shares, and if the deal is completed, its stake would increase to slightly over 50.1%.

The offer represents a 24% premium over MGM's closing stock price on May 29. Diller stated in the announcement: "We have always believed that the market has significantly undervalued the strength and durability of MGM's assets."

Board Review and Company Response

MGM stated that its board of directors, along with financial and legal advisors, is evaluating the offer. The company emphasized in its statement: "The company cannot guarantee that this proposal or any subsequent proposal will result in an agreement or transaction, nor can it guarantee the timing, price, or other terms and conditions of any such agreement. The company remains focused on advancing its position as a leading global gaming and entertainment company."

Background and Investment Rationale

People Inc. (formerly IAC) first invested in MGM in 2020, when it acquired a 12% stake in the hotel group. In a statement at the time, Diller said that what attracted his company to invest in MGM, in addition to the hotel business, was "the area that currently accounts for only a small portion of its revenue—online gaming."

In Monday's offer, Diller reiterated the investment rationale: "We began investing in MGM because we believed it represented a rare business: one with physical assets that AI cannot easily replicate or disintermediate, as well as exceptional digital growth opportunities. That belief has only strengthened over time."

In its offer, People Inc. noted that MGM's assets and business "are currently not achieving their full potential in the public market, and this situation would be difficult to correct while MGM remains in its current public company form."

Financial Performance and Market Comparison

In the first quarter of fiscal 2026, MGM reported record net revenue of $4.5 billion, with growth partly driven by the performance of BetMGM, its North American online sports betting joint venture. In an April update, BetMGM lowered its fiscal 2026 net revenue expectations to between $2.9 billion and $3.1 billion, slightly below its previous guidance of $3.1 billion to $3.2 billion.

Despite this, MGM CEO Bill Hornbuckle remained optimistic during an April analyst call, emphasizing that the Las Vegas region achieved its first quarter-over-quarter revenue growth since the third quarter of 2024. Hornbuckle stated: "Our optimism across all business segments remains strong, especially in Las Vegas. We are still on track for growth this year."

Shareholder Appeal and Industry Dynamics

Diller's offer may appeal to shareholders seeking an immediate cash infusion. He said on Monday: "This transaction would bring significant benefits to shareholders of both companies. MGM shareholders would have the opportunity to reduce investment risk and immediately realize an attractive value for their shares in cash."

The MGM acquisition offer comes less than a week after Fertitta Entertainment announced its $17.6 billion acquisition of Caesars Entertainment. That deal has been approved by Caesars' board, but the agreement includes a "go-shop" provision allowing Caesars to solicit other bids and negotiate alternative acquisition proposals until July 11.