A proposed takeover of global casino giant MGM Resorts International by major shareholder Barry Diller will no longer proceed, with MGM announcing this morning that Diller’s People Incorporated has withdrawn its offer.
As such, MGM Resorts – the largest operator on the Las Vegas Strip, controlling shareholder of Macau-facing MGM China and developer of the US$10 billion MGM Osaka project in Japan – said it will continue as a “standalone company.”
In a statement, MGM acknowledged that a special committee of its Board of Directors has over the past several months participated in negotiations with People Inc to advance the interests of its shareholders. However, the proposed acquisition by People Inc of all outstanding shares in MGM it does not already own has now fallen through.
“The Board remains excited to continue to lead MGM Resorts as a standalone company,” said MGM chairman, Paul Salem. “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. In addition, our international portfolio of MGM China and the significant opportunity ahead with MGM Osaka support a clear path to increasing shareholder value.”
The proposed acquisition of MGM Resorts by Diller’s People Inc was first announced in June, with the deal valuing the company at around US$18 billion.
People Inc currently owns 26.1% of MGM’s common stock.
Had the acquisition proceeded, People Inc would have owned just over 50.1% of the equity of the company, with other investors holding minority interests. People Inc would have controlled the MGM business and MGM would have become a private company, it explained at the time.
However, analysts had suggested the valuation was too low and that Diller’s offer did gave little valuation credit to long-term valuation drivers like MGM Osaka.
It had also been rumored that MGM could look to sell off its Macau and Japan interests under Diller’s watch, focusing purely on its US assets.
MGM’s holds a 56% stake in MGM China Holdings, operator of MGM COTAI and MGM MACAU.
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