MGM Resorts International shares dropped sharply on Thursday after People Inc., the media and hospitality company led by billionaire Barry Diller, withdrew its proposal to take the casino giant private.
The pullback sends a wave of uncertainty through the gaming sector, as Diller’s firm had offered $48.30 per share in an all-cash bid announced in June. People Inc. already holds a 26.1% stake in MGM Resorts, making the failed takeover a significant reversal for one of the industry’s most watched deals.
In a statement, Diller explained that the decision stemmed from the mounting complexities involved in closing the transaction. “There are lots of ingredients that go into a proposal of this kind on its way to completion,” Diller said. “We didn’t feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time.”
According to reports from CNBC’s David Faber, a primary factor in the withdrawal was the substantial debt burden that would have been placed on MGM Resorts had the acquisition proceeded. The financial implications of absorbing MGM’s liabilities likely made the deal structurally unviable for Diller’s team.
Despite scrapping the current offer, Diller left the door open for future negotiations. “We at People Incorporated remain open to and interested in the possibility of a strategic transaction with MGM Resorts and look forward to considering a range of alternatives,” he stated.
The collapse of the MGM deal comes shortly after shareholders at rival Caesars Entertainment approved a separate buyout. Billionaire Tilman Fertilla’s offer to acquire Caesars for $17.6 billion was endorsed by investors, who will receive $31 per share in cash.
Leave a Reply