Key Points
- MGM Resorts and People Inc. amended their voting agreement: People and Diller will vote with the board on any change-of-control transaction and will not exceed a 29.9% stake, while MGM agreed not to take defensive or adverse actions.
- The $18 billion take-private offer at $48.30 a share, a 10.6% premium, died on financing. Hornbuckle said the sides agreed on price, but People could not assemble a syndicate and withdrew in September.
- Hornbuckle said reciprocal talks — including a reported MGM bid for People Inc. — are over, and the company is refocusing on operations.
Summary
MGM Resorts has closed the door on a merger with its largest shareholder, Barry Diller’s People Inc., after the two sides signed an amended voting agreement disclosed in a Wednesday filing. Under the pact, People Inc. and Diller will vote their MGM shares in line with the board’s recommendation on any change-of-control transaction, and People agreed not to raise its stake above 29.9%. In return, MGM agreed not to take defensive measures or actions adverse to People or Diller. The talks began June 1, when People Inc., formerly IAC, offered to take MGM private at $48.30 a share in cash — a 10.6% premium and a roughly $18 billion deal — arguing that public markets undervalued the business. CEO Bill Hornbuckle said on the earnings call that the two sides “came to terms on price,” but People could not assemble a financing syndicate and withdrew the offer in September. Asked about a Wall Street Journal report that MGM had considered bidding for People Inc., Hornbuckle said the back-and-forth was about unlocking the value of People’s roughly 25% stake, and that both sides are done.
