MGM Buyout Deal in Doubt as Las Vegas Recovery Slows

JPMorgan analyst Daniel Politzer cast fresh doubt on MGM Resorts' pending buyout deal. In a note on Tuesday, he said Las Vegas' recovery appears to be slowing. Politzer questioned the status of Barry Diller's $18 billion offer for MGM. He asked why the deal, announced in June, has not closed. MGM shares have fallen below $40, well under Diller's $48.30-per-share bid. Politzer warned a collapsed deal could send shares toward $35. Regional casino stocks also slid sharply after the note circulated.

Vegas Strip Weakness Adds Pressure to Wider Casino Selloff

Politzer's note rattled gaming stocks across the industry. He wrote that Macau's rebound from World Cup-related weakness also looked shaky. Boyd Gaming, Churchill Downs, Penn Entertainment, and Station Casinos fell roughly 9% as a group. The drop came despite what Politzer called modest year-over-year growth in regional markets so far in 2026. He cited easier comparisons ahead and stable regional trends as reasons for optimism.

Investors, however, focused on the Las Vegas Strip's weaker performance. The Strip remains MGM's largest revenue driver. Any prolonged slowdown could complicate the special committee's valuation talks with Diller.

Diller's $18B Offer and MGM's Valuation Debate

Diller unveiled his $18 billion offer for MGM on June 1. The bid values MGM at $48.30 per share in cash. People Inc. already owns roughly 26.1% of MGM, making it MGM's largest shareholder.

MGM's board formed an independent special committee in July to review the proposal. CEO Bill Hornbuckle said the committee has no affiliation with Diller or People Inc. Some analysts argue the offer undervalues MGM. Tilman Fertitta's separate $17.6 billion bid for Caesars Entertainment implied MGM could be worth $55 to $60 per share.

MGM's own CFO, Jonathan Halkyard, said investors undervalue the company. Diller echoed that view in his original offer letter, saying the market "materially undervalues" MGM's assets.

Politzer's note suggests the delay is now testing investor patience.

Politzer's Top Picks: Station Casinos and Penn

Not all of Politzer's note was bearish. He named Station Casinos and Penn Entertainment as his top sector picks. Station's recent construction disruptions are ending, he noted, allowing the company to realize returns on completed capital projects. Politzer also pointed to the upcoming North Fork casino in California. Station will earn management fees once that property opens.

Penn Entertainment, he wrote, is hungry for acquisitions. But he expects Penn to prioritize balance-sheet strength over new deals, with projects like Boomtown New Orleans as an example. Politzer described regional casinos as stable performers despite the stock selloff. Investors, he said, are not rewarding that stability right now.