The $18 Billion Offer for MGM Is Officially Dead

A months-long courtship over the owner of some of Las Vegas’s biggest resorts has ended. MGM Resorts disclosed in a Wednesday filing that an amended voting agreement with People Inc., the former IAC led by Barry Diller, settles the matter and effectively closes merger talks.

Under the agreement, People and Diller will vote their MGM shares in line with the board on any change-of-control transaction, and People will not hold more than 29.9 percent of the company. In return, MGM agreed not to take defensive or adverse actions against them. People is MGM’s largest shareholder.

The talks began June 1, when People offered $48.30 per share in cash to take MGM private, a 10.6 percent premium that valued the deal at roughly $18 billion. CEO Bill Hornbuckle said the two sides reached agreement on price, but People could not assemble a financing syndicate and withdrew the offer in September. A Wall Street Journal report said MGM had considered bidding for People instead; Hornbuckle said the back-and-forth was really about unlocking value in People’s roughly 25 percent stake.

The collapse arrives as MGM’s Las Vegas Strip revenue fell 2 percent in the third quarter, which Skift attributes to higher airfares and gas prices. The resorts have been sliding for two years, and it is unclear who else might want the company. MGM says it is refocusing on operations.

Sources: Skift