Barry Diller’s People Incorporated has withdrawn its proposal to acquire MGM Resorts International, ending negotiations that had run for several months and valued the company at more than $18 billion.
People, which already owns approximately 27% of MGM, proposed in June to buy the shares it did not own for $48.30 per share in cash. The company’s stake is equivalent to 66.8 million MGM shares, which it continues to hold following the withdrawal.
“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,” Diller said.
Neither People nor MGM disclosed further details of the issues that ended the talks. The companies gave no specific explanation of the regulatory, financial or operational factors that may have stood in the way of an agreement.
The Wall Street Journal first reported the withdrawal on Wednesday. MGM’s board had created a special committee of independent directors to assess the approach from People. That committee then negotiated with People over several months.
The failed bid removes a sizeable gap between the proposed purchase price and MGM’s recent trading levels. MGM shares closed at $37.85 on the day of the withdrawal. They fell 10% in premarket trade after the announcement, reaching $33.69, their weakest level in seven months.
People’s June approach had pushed MGM shares to an 18-year high. The stock reached a 52-week high of $51.59.
MGM will remain a standalone company following the end of the talks. People said it remains open to and interested in the possibility of a strategic transaction with MGM, though it gave no timetable for any future move.
The proposed acquisition was intended to extend People’s operations beyond traditional media ventures. With the transaction abandoned, Diller retains a large holding in MGM while the operator’s independent directors and investors face the company’s next steps without an agreed sale.
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