Barry Diller’s People Inc Walks Away From Its $18B MGM Resorts Buyout

People Inc. (formerly IAC), the media and holding company chaired by Barry Diller, has formally withdrawn its non-binding $48.30-a-share proposal to acquire the remaining 73.5% of MGM Resorts International it did not already own. The withdrawal terminates a proposed $18 billion privatization transaction originally submitted to MGM’s board of directors on June 1, 2026. People announced the decision at 6:05 pm Eastern on Wednesday, September 23, and MGM confirmed it 22 minutes later, saying it will carry on as a standalone company from its Las Vegas headquarters in Nevada.

Diller, People’s chairman and senior executive, put the retreat down to a deal that never came together: “There are lots of ingredients that go into a proposal of this kind on its way to completion. 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.”

A Bid That Never Got Past the Letter

The June proposal was a non-binding letter to MGM’s board, addressed to chairman Paul Salem and chief executive William Hornbuckle. It offered 100% cash, a premium of 24.1% to MGM’s volume-weighted average price over the 30 trading days to May 29 and 10.6% over the most recent close. People said the deal would not carry a financing condition and would be funded from cash at People and MGM plus other equity investors and lenders.

Diller said he’d recuse himself from the MGM board’s deliberations, and a special committee of the board handled the talks instead. MGM says that committee negotiated with People over the past several months before the offer was pulled.

The letter also promised something that still matters now. People said it had no intention of selling its MGM stake or backing a sale of the company to anyone else.

Debt Was the Sticking Point

Neither company gave a detailed reason for the collapse. CNBC’s David Faber reported that Diller backed off in part because of the significant debt load the deal would have created. Under the June plan, People expected to own “just over a majority” of the post-closing equity, with other investors holding the rest.

Diller made a point of saying People didn’t need the deal. “People Incorporated is doing just fine with its principal publishing business achieving its 11th quarter of growth with plenty of cash to both invest in its business and purchase its stock,” he said.

Diller Still Owns a Quarter of MGM

People still holds 66.8 million shares, which it describes as about 27% of MGM. Its amended Schedule 13D, filed with the SEC on the morning of September 24, puts the exact holding at 66,822,350 shares, or 26.5% of the stock outstanding in late July, and says People made no trades in MGM shares in the 60 days before the filing.

The door isn’t shut. “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,” Diller said. The filing adds that People will review its investment “on a continuing basis” and may buy or sell shares, or explore other business deals with MGM, in the future.

People, formerly IAC, began investing in MGM in 2020. Its June letter explained why: it sees MGM as “a durable growth business not easily displaced by technology.” That’s a bet on the physical side of how casinos make money, the resorts and gaming floors that People thinks technology can’t easily push aside.

Investors Took It Badly

MGM shares sank about 11% on Thursday, September 24, according to CNBC. Analysts split on what comes next. Wall Street equity analysts reflected divided perspectives on long-term valuation: Bank of America resumed coverage with a Neutral rating and a $40 price target, while Mizuho maintained an Outperform rating while adjusting its price target to $55, noting that the $48.30 proposal represented a modest EBITDA multiple relative to historical gaming transaction standards.

MGM Bets on Its Own Plan

MGM chairman Paul Salem framed the outcome as a vote of confidence. “The Board remains excited to continue to lead MGM Resorts as a standalone company,” he said. “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.”

He also pointed to MGM China and “the significant opportunity ahead with MGM Osaka,” the integrated resort MGM is developing in Japan. Online, BetMGM is MGM’s 50/50 venture for sports betting and online gaming in North America, which puts the company in the real-money online casino business as well as the resort one.

The timing stands out. A day earlier, on September 22, Caesars Entertainment shareholders approved Tilman Fertitta’s $17.6 billion deal to take their company private at $31 a share. MGM’s shareholders never got a deal to vote on.