Barry Diller offers to buy rest of MGM in nearly $19-billion deal

Barry Diller has made an offer for the remaining portion of MGM Resorts International he doesn’t already own, marking the latest pivot for the billionaire media mogul after overhauling IAC Inc.

The proposal, which would be made through Diller’s business empire, People Inc., is for $48.30 a share for the 73.9% of MGM Resorts that it doesn’t already own, according to a statement on Monday.

Such a deal would value MGM Resorts, the casino operator behind Bellagio and Mandalay Bay, at $18.8 billion, including debt.

The bid is a 10.6% premium over MGM Resorts’ closing price Friday and more than 30% higher than its volume-weighted average price over the last 90 days.

“We began investing in MGM nearly six years ago because we believed it represented a rare kind of business: one with real world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities,” Diller said in the statement. “We continue to believe the market materially undervalues the power and durability of MGM’s assets.”

MGM Resorts shares jumped 16% Monday in New York to close at $50.69. That brings gains this year to about 38% compared with an 11% increase in the Standard & Poor’s 500 index.

MGM said its board “will carefully review and consider the proposal to determine the course of action” for the company and its shareholders.

Diller, the 84-year-old media visionary who led Paramount during a golden age in Hollywood and helped launch the Fox broadcasting network, later turned IAC into one of the most successful internet incubators through a formula of building and then spinning off companies including Expedia, Ticketmaster and Vimeo.

Diller’s journey, which he described in a letter to shareholders in April, includes buying into little Silver King Communications in 1995. Over the next decades, the company evolved, becoming HSN, then USA Networks, and finally, in 2003, IAC/InterActiveCorp., and then even more simply, IAC Inc.

What began as a string of television stations resulted over the years in Diller’s owning and operating more than 200 companies and overseeing well over 100 minority investments. IAC was at that point the definition of a conglomerate, he said, and embarked on the process of shedding divisions such as home services platform Angi and Care.com.

In April, Diller announced he was changing the name of IAC to People Inc. to better represent its focus on the publishing business, as well as its investment in MGM Resorts.

The MGM holding represents one of People’s main businesses, along with a digital publishing arm anchored by the namesake celebrity magazine.

Diller first invested in MGM Resorts in 2020 when IAC bought an approximately 12% stake for roughly $1 billion during the COVID-19 pandemic, just weeks after spinning off Match.com, at a time when casino and travel stocks were under pressure. At the time, Diller was particularly interested in the fast-growing online betting market, which represented a tiny portion of IAC’s revenue.

MGM co-owns the sports betting and online gambling venture BetMGM with U.K. gaming group Entain. BetMGM is one of the main U.S. online sports betting sites, competing with FanDuel and DraftKings.

Diller’s progressive accumulation of shares in MGM Resorts stemmed from a belief “that there was no technology that was going to displace a customer from going to Las Vegas or any of MGM’s other physical properties,” he said in the April shareholder letter.

MGM owns 40% of the Las Vegas Strip, “an entertainment nucleus that simply cannot be replicated anywhere in the world,” Diller said in the letter. MGM has leading properties in Macau and is building a massive resort in Japan, which represents “a giant future opportunity,” he added.

Still, Las Vegas saw a significant drop in visitors last year in part due to fewer visitors from Canada, where tensions with the U.S. over tariffs and other issues have prompted a boycott of American products and tourism.

In the letter to the MGM board on Monday, Diller said the company’s businesses were “not currently realizing their full potential in the public markets and that it will be difficult to correct this situation in MGM’s current form.”

In its latest financial results, MGM Resorts reported adjusted revenue of 49 cents a share in the first quarter and revenue of $4.45 billion.

People expects to fund a transaction with a combination of cash and additional debt and equity funding commitments, according to the statement. People expects that it will own just over 50.1% of the equity of the company, with other investors, which may include existing shareholders of MGM, holding minority interests.

Schuetz writes for Bloomberg.