Another investor is placing a big bet on the U.S. casino market.
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People Inc. submitted a nonbinding proposal to acquire MGM Resorts International, which owns over a dozen casinos primarily in Las Vegas.
The company, previously known as IAC and owned by media executive Barry Diller, on Monday announced its bid to buy the casino company for $48.30 per share, roughly $18B in total. CNBC first reported the pending deal.
People Inc. already has a 26.1% stake in MGM. Diller sits on MGM's board and said he would recuse himself from its vote on the deal.
"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 a statement. "We continue to believe the market materially undervalues the power and durability of MGM's assets."
Trading under the ticker MGM, the casino giant's stock price was up 16% as of 2 p.m. EST Monday.
MGM operates 31 casinos and hotels, primarily concentrated in Las Vegas, including the MGM Grand, Mandalay Bay and Bellagio. It also has casinos in Michigan, New Jersey, New York, Mississippi, Maryland and Massachusetts.
The company doesn't own all of the real estate its casinos sit on.
In 2016, MGM created a REIT spinoff for the properties called MGM Growth Properties, which at the time managed 15 hotels, 33,000 rooms and 3.6M SF of meetings and convention space. VICI Properties acquired the REIT in 2021.
The announcement of its sales comes less than a week after another major casino deal.
Fertitta Entertainment announced Thursday it has reached a deal to buy Caesars Entertainment for $17.6B. The deal still needs to be approved by regulators and Caesars shareholders, and Caesars can seek competing bids through July 11.
