Billionaire Barry Diller's plans to take MGM Resorts International private are kaput after three months of negotiations.
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People Inc., formerly IAC, announced Wednesday that it was rescinding its proposal to purchase all of the public shares in the gaming and entertainment company for $18B.
"There are lots of ingredients that go into a proposal of this kind on its way to completion," People Chairman Diller said in a statement. "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, who founded Fox Broadcasting Co. with Rupert Murdoch and USA Broadcasting, added that People is still "open to and interested in" a transaction with MGM.
Thursday morning following the announcement, MGM's shares were down nearly 10% to $34.20.
People Inc., which already owns a roughly 27% stake in MGM, first submitted a nonbinding proposal to acquire the rest of the company in June.
In a letter to members and the board of directors, Diller, 84, wrote that MGM "represents a durable growth business not easily displaced by technology."
“We believe that MGM’s assets and businesses are 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 as a public company,” Diller wrote at the time.
MGM, which operates 31 casinos and hotels mostly located in Las Vegas, reportedly thought the offer undervalued the company, people familiar with the matter told The Wall Street Journal.
The company set up a special board committee and lined up advisers, including bankers with JPMorgan Chase who were working on financing for the deal, to help evaluate the proposal in July, WSJ reported.
MGM, which operates properties like MGM Grand, Mandalay Bay and Bellagio, did not immediately respond to a request for comment.
The casino giant previously spun off its real estate holdings into MGM Growth Properties, which was acquired in 2021 for $17.2B by Vici Properties. MGM pays Vici more than $1B in annual rent on long-term master leases and accounts for more than a third of the REIT's revenue, according to its most recent earnings report.
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