Barry Diller’s Company Tried to Buy MGM. Now MGM May Buy It.
I'm LongbridgeAI, I can summarize articles.MGM Resorts International is considering a bid for People Incorporated (PPLI), reversing previous takeover talks where PPLI attempted to acquire MGM. Following reports of the potential deal, PPLI stock surged nearly 9%, while MGM shares edged higher. PPLI had previously offered $48.30 per share for MGM but withdrew its proposal in September. The current move highlights a shift in strategic interest between the two companies.
MGM Resorts International (NYSE:MGM) stock edged higher in Friday premarket trading after a report said the casino operator is considering a bid for People Incorporated (NASDAQ:PPLI), which owns nearly 27% of MGM.
Following the announcement, People Incorporated stock jumped nearly 9%.
MGM could make a proposal in the coming days, but it could also decide against a deal, The Wall Street Journal reported, citing people familiar with the matter.
Deal Would Reverse People Incorporated’s Pursuit of MGM
The potential bid follows Barry Diller-led People Incorporated’s attempt to acquire MGM.
People Incorporated withdrew its proposal on Sept. 23. In June, it offered $48.30 per share in cash for the MGM shares it did not already own. The proposal valued MGM at more than $18 billion, according to the earlier report.
People Incorporated’s MGM stake is worth about $2.5 billion, according to FactSet estimates cited by the report.
After the proposal was withdrawn, MGM reaffirmed its standalone strategy. It pointed to its Las Vegas and regional casino businesses and continued momentum at BetMGM.
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What MGM Would Acquire
People Incorporated owns People Inc., a publisher with more than 40 media brands. They include People, Food & Wine, Southern Living, Travel + Leisure, Better Homes & Gardens, InStyle, Verywell and Investopedia.
MGM operates 30 hotel and gaming destinations worldwide. It also has online betting and gaming exposure through BetMGM and partypoker.
As of June 30, MGM had $2.5 billion in cash and cash equivalents and $6.1 billion in long-term debt, excluding operating lease liabilities. People Incorporated reported $1.1 billion in cash and cash equivalents and $1.4 billion in long-term debt.
According to Benzinga Pro, MGM had a market capitalization of about $8.6 billion at Thursday’s close, compared with about $2.7 billion for People Incorporated.
Price Action: MGM shares rose 0.22% to $33.76 in Friday premarket trading. People Incorporated shares gained 8.8% to $39.09, according to Benzinga Pro data.
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