button in SafariMGM Resorts Stock Up Again This Week After $18b Offer From People Inc
MGM Resorts International's stock leaped 13.8% over the weekend after People Inc. announced a non-binding proposal to buy the company for $48.30 per share, well above the market price at the time. MGM stock closed at $43.67 on Friday, jumping to $49.69 on Monday after the offer was announced.
This was the second big move in MGM Resorts stock in the last week. The casino company's stock jumped 7.9% from $38.45 on May 26 to $41.50 dollars on May 27 with the news that JP Morgan had upgraded the company's rating from "Overweight" to "Neutral".
Even with this recent jump included, People's offering price still represents a 24.1% premium on the last 30 days' average price. It was also 10.6% above the market price at the time the offer was made.
Who Are The Players?
MGM Resorts International is a multinational entertainment company that owns casino resorts in the United States, China, and Macau.
People Inc., which recently rebranded from IAC, is the media company behind People magazine and other outlets like Entertainment Weekly, TheSpruce, and Martha Stewart Living.
"We continue to believe the market materially undervalues the power and durability of MGM's assets," Barry Diller, Chairman and Senior Executive of People, explained, adding: "We believe MGM's management team is superb, and that there is a compelling opportunity to support MGM's next phase of growth and to help unlock its full value."
Those assets included the BetMGM brand, which include online casinos and sportsbooks.
People already owns 26.1% of MGM's outstanding common stock. Even so, the purchase price for the remaining stock would exceed $18 billion, according to reporting from the Guardian.
Mr Diller said: "People Incorporated will be a good steward for MGM's assets, given our large stake in the business today and our deep familiarity with the business."
Diller, who helped found Fox Television and mentored Michael Eisner, is already on the board of MGM but said in the offer letter that he will recuse himself from any deliberations at the MGM end of the deal.
The deal will be funded by a mixture of cash on hand and "new debt and equity funding commitments," according to the company's announcement.
The MGM board will now have to consider the offer.
