MGM Forms Special Committee as Diller Takeover Talks Intensify

MGM Resorts International has established a special board committee and engaged advisers to evaluate the $12.4 billion takeover proposal from media mogul Barry Diller’s People Inc., with negotiations reportedly accelerating in recent weeks. According to sources familiar with the matter, the committee was formed to assess Diller’s June 1 offer of $48.30 per share for the portion of MGM not already owned by People Inc., which controls 26.1% of the casino operator. The proposal values MGM’s total enterprise at roughly $18 billion including debt. While the talks have advanced, there is no guarantee a deal will be reached, and MGM has not publicly responded beyond acknowledging receipt of the bid.

Diller, who has been MGM’s largest shareholder for six years, made his move shortly after rival Caesars Entertainment agreed to be acquired by Tilman Fertitta’s Fertitta Entertainment for about $17.6 billion. JPMorgan Chase is among the banks advising Diller and has committed to financing the potential transaction, alongside other financing sources. In a statement at the time of the offer, Diller said People Inc. is confident it can finance the acquisition using existing cash and preliminary discussions with equity investors, adding that “MGM’s assets and businesses are not currently realizing their full potential in the public markets.”

Both MGM and Diller agree that the broader market undervalues the company. At the NYU International Hospitality Investment Forum shortly after the offer, MGM CFO Jonathan Halkyard said the valuation of the company’s domestic operations stood at “a very low multiple” and that investors sometimes “just aren’t doing the work to value the sum of the parts.” He described Diller’s assessment as “gratifying.” Diller, meanwhile, noted that the market materially undervalues the power and durability of MGM’s assets, which include Las Vegas resorts, international properties, and the BetMGM online betting business. Some analysts have speculated that MGM could be worth $55 to $60 per share based on the Caesars deal, suggesting Diller’s initial offer may be insufficient.

A competing bid for MGM is viewed as unlikely. Diller made clear that People Inc. does not plan to sell its stake and will not vote in favor of any other change-of-control transaction. In February, Diller and MGM reached an agreement limiting his voting power except in extraordinary circumstances — a competing takeover offer would likely qualify. The development comes as Caesars’ go-shop period expires, with no public competing bid from rumored suitor Carl Icahn. Diller’s ultimate aim is to secure a 50.1% controlling stake and take MGM private, positioning it as an “AI-proof” asset with strong digital growth potential while retaining current CEO Bill Hornbuckle.

Following the news, MGM shares rallied in after-hours trading to around $48.40, slightly above the offer price, signaling that investors see a reasonable chance of completion. However, the board reportedly believes the current bid still undervalues the company. Halkyard also noted that MGM faces pressure from the rise of prediction-market platforms and a shift in Las Vegas toward wealthier visitors, prompting discounting and incentives. The outcome of the talks will likely hinge on whether Diller raises his bid to a level the special committee deems adequate.