MGM Stock Is Already Trading Above Barry Diller's $48.30 Bid — Analyst Says Board Should Ask For Even More

• MGM’s largest shareholder, People Inc., offered $48.30 per share in cash to buy the remaining shares in the casino operator. 
• Stifel says People’s offer undervalues MGM, with the stock trading above the bid price. 
• Stifel previously valued MGM at $50–$55 per share after the Caesars deal and believes MGM’s board could reject the current offer.

MGM Resorts International (MGM) stock is drawing attention after People (IAC) 's takeover offer sparked debate among analysts, with Stifel suggesting the proposal may not fully reflect MGM’s value. 

On Monday, media legend Barry Diller’s People Inc. (IAC), which is also MGM’s largest shareholder, submitted a proposal to acquire the casino operator’s remaining publicly held shares for $48.30 each in cash and remove the company from public markets.

Stifel Feels MGM Offer Undervalued

Stifel thinks the initial offer is too low for MGM, noting that the stock is trading above the bid price, which suggests investors expect a higher offer. However, the firm says it is hard to find another buyer who could make a better bid. 

According to the analysis, few strategic buyers appear capable of mounting a competing acquisition, particularly given People Inc.’s existing influence through its 26% voting stake.

So, instead of launching competing bids, private-equity groups could choose to participate alongside People if negotiations advance, said Stifel.

Stifel pointed to its earlier assessment following the announcement of the acquisition of Caesars Entertainment (CZR) by Fertitta Entertainment. At that time, the firm argued MGM’s equity value could reasonably fall within a range of roughly $50 to $55 per share. 

Based on its valuation estimates, Stifel believes MGM’s board may turn down the initial offer and push for a higher price before agreeing to any deal. The firm also maintained its ‘Buy’ rating on the stock. 

MGM Resorts’ stock edged 0.7% lower overnight on Monday, after rallying to a year-high of $51.56 in the regular session. MGM also posted the strongest gain among S&P 500 stocks to begin June. 

Truist Sees Benefits In MGM Buyout 

In a separate note, Truist analyst Barry Jonas explained that full ownership of MGM could simplify the investment story for People Inc. and address long-standing investor questions about the company's indirect exposure to the casino operator.

Truist believes MGM could perform better as a private company. Without the pressure of delivering short-term results to public investors, management may have more freedom to focus on long-term plans and growth. 

Despite identifying potential advantages, the firm cautioned that a privatized MGM could face scrutiny over reduced public disclosures.

MGM controls some of the most recognizable properties on the Las Vegas Strip, including Bellagio, MGM Grand and Mandalay Bay. The company also maintains a sizable presence in digital wagering through BetMGM, its sports betting and online gaming venture. 

Investors increasingly view these assets as strategically valuable as demand for entertainment, gaming and destination travel continues to grow.

MGM Retail Traders View 

On Stocktwits, retail sentiment around the stock rose to ‘extremely bullish’ from ‘bullish’ the previous day. 

A user said, “Entain owns 50% of MGM's most compelling digital platform, betMGM in the USA. If this takeover deal closes, People will have the cleanest shot of taking over Entain if they want to, and massively uplevel the digital biz of MGM globaly if they do.”

Another user wondered, “So now that is $50… does that mean they gotta increase it further to entice a sale?” 

MGM stock has gained nearly 39% year-to-date. 

Also See: SPCE, BB, HPE Stocks Hit 52-Week Highs Today: What's Driving The Surge?

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