MGM Resorts Ends Takeover Talks With Barry Diller's People Inc.
MGM CEO Bill Hornbuckle says merger discussions with largest shareholder People Inc. are over, as a new voting pact caps Diller's firm at 29.9% ownership.
MGM Resorts International chief executive Bill Hornbuckle has confirmed that merger discussions with People Inc., the media company controlled by Barry Diller, have concluded in both directions, according to Casino.org News.
Hornbuckle addressed the matter at the opening of MGM's third-quarter earnings call on Wednesday, pointing to a new voting agreement between the two companies that was unveiled a day earlier. That agreement caps People's stake in MGM at 29.9% of outstanding equity, while giving the publisher a path to approve a future takeover of the casino operator by another party.
"The discussion between MGM and People ends there. Management continues to be focused on the business as clear and consistent," Hornbuckle told analysts on the call, adding that the company would present "a focused operational approach, solid fundamentals and a compelling pipeline."
The announcement follows People's decision last month to withdraw an $18 billion takeover bid for MGM, which Casino.org reported had collapsed amid the complexity of structuring such a deal.
After that bid fell apart, speculation emerged that MGM might instead pursue People in the opposite direction, as a means of regaining control over its own equity held by Diller's company — effectively a large-scale share buyback. Hornbuckle's comments on the call suggest that path has been ruled out.
"Look, we are done, and I meant that we're going to refocus on our business, the dialogue back and forth between us and people on, you buy us, we'll buy you," Hornbuckle said in response to an analyst's question. "It was all about trying to unlock the value of that 25% of our shares, we're done."
People Inc. owns more than 26% of MGM's outstanding shares, making it the casino operator's largest shareholder. Diller had previously floated interest in a future "strategic transaction" involving MGM once the original bid lapsed, though Casino.org notes it remains unclear what form such a deal might take, and nothing of that kind appears imminent.
Texas Capital analyst David Bain said the end of talks removes a source of uncertainty that had weighed on MGM's stock. He noted that some arbitrage models had seen theoretical merit in a two-step transaction — acquiring MGM shares via a takeover of People Inc. followed by an asset divestiture — but argued the structure carried significant risk.
"The structural opacity, uncertain execution timeline, and shifting transaction premiums may have created a persistent valuation discount for MGM shares," Bain wrote, as quoted by Casino.org.
"In our opinion, terminated discussions and an amended voting pact capped at 29.9%, removes a structural distraction," Bain added.
With the voting agreement now in place and both sides publicly stepping back, MGM's leadership has signalled it intends to shift investor attention back toward its operating performance rather than ownership speculation.