MGM Resorts Shares Jump as $18 Billion Diller Bid Advances

MGM Resorts International shares climbed in after-hours trading Friday after reports surfaced of advancing takeover talks with Barry Diller's People Inc. The Wall Street Journal reported that MGM formed a special committee of independent directors to evaluate an acquisition proposal from Diller, who already controls roughly 26% of MGM shares. Diller unveiled the bid on June 1, valuing the casino giant at $18 billion, or $48.30 a share. Talks have progressed in recent weeks, though a deal is far from guaranteed. MGM has declined to comment publicly beyond confirming it received the offer.

MGM Weighs Diller Bid as JPMorgan Backs Financing

According to the Journal, MGM has brought in outside advisors to work alongside its newly formed special committee in evaluating Diller's proposal. Diller, whose People Inc. has held an MGM stake for six years, is working with JPMorgan Chase, which has agreed to finance the deal. Sources familiar with the discussions said MGM believes the offer undervalues its business. MGM shares settled at $48.40 in after-hours trading Friday, just above Diller's original offer price, which suggests some investors expect a deal near that level. When he unveiled the bid, Diller said he was confident it could be financed through existing cash, along with talks with potential equity investors and lenders. MGM has otherwise stayed quiet on the offer since it became public in June.

Analysts Say MGM Could Be Worth Far More than $48

Some analysts argue that Diller's offer falls short of MGM's true worth.

Tilman Fertitta's roughly $17.6 billion bid for Caesars Entertainment implied that MGM could be worth $55 to $60 a share, well above Diller's $48.30 offer.

Others suggest MGM may be worth even more. MGM's own executives appear to share that view.

Speaking at the NYU International Hospitality Investment Forum last month, Chief Financial Officer Jonathan Halkyard said the broader investment community undervalues MGM. He noted that investors may not fully appreciate its diverse portfolio of Las Vegas resorts, international properties, and the BetMGM betting business. Diller echoed that sentiment in his June statement, saying "materially undervalues the power and durability of MGM's assets." Whether that belief pushes him to raise his offer remains unclear.

Rival Bid Unlikely as Diller Holds Firm on Stake

Analysts consider a competing bid for MGM unlikely, largely due to Diller's substantial ownership stake. In his June statement, Diller made clear that People Inc. has no plans to sell its MGM shares and would not support a rival change-of-control offer. Two months earlier, Diller and MGM reached a voting agreement that cap his voting power except in extraordinary circumstances, a threshold a competing offer would likely meet.

These talks unfold as casino operators navigate shifting market conditions, including slower visitation among lower- and middle-income consumers and rising competition from prediction market platforms. News of the accelerating talks also coincided with the expiration of Caesars Entertainment's go-shop period, during which rumored bidder Carl Icahn made no competing offer.