Tables Turn In Las Vegas: Casino Giant MGM Resorts Considers Buying The Publisher That Tried To Buy It

• The report landed one day after People pulled its June bid to take MGM private. 
• People has a 27% stake in MGM. 
• A proposal could come in the coming days, though the report noted the talks could still fall apart.

Shares of People Incorporated (PPLI) jumped 13% in after-hours trading on Thursday after a report stated that MGM Resorts (MGM) is considering a bid for the media company, reversing the direction of a months-long takeover dance.

PPLI closed at $35.93 and traded as high as about $41 after-hours. MGM, meanwhile, finished regular trading at $33.69, down about 11% after People withdrew its own acquisition offer the day before, and was little changed in extended hours.

A Sudden Role Reversal

The Wall Street Journal, citing people familiar with the matter, reported that MGM is discussing a possible offer for Barry Diller’s People Inc., which already owns about 27% of the casino operator and publishes titles including People and Food & Wine. A proposal could come in the coming days, though the report noted the talks could still fall apart.

How The Talks Unraveled

People, formerly IAC, offered $48.30 a share in cash in June for the MGM stock it did not already own, valuing the company at more than $18 billion including debt. Diller, who sits on MGM’s board, argued the casino assets were a hedge against AI disruption of digital publishing. A special committee of MGM directors negotiated for months.

On Wednesday, however, People withdrew. “We didn't feel the mix was coming together in the way we had hoped…,” Diller said. Reports pointed to trouble lining up outside equity and the debt the deal would have piled on People.

MGM’s board said it is “excited” to stay independent and pointed to Las Vegas properties, BetMGM, MGM China, and the Osaka project. Diller also said the company remains open to a “strategic transaction.” While People Inc currently has a market capitalization of $2.68 billion, MGM is valued at about $8.48 billion.

How Did PPLI, MGM Retail Traders React?

On Stocktwits, retail sentiment around MGM stock stayed in ‘bullish’ territory over the past 24 hours, while message volume remained ‘high.’

Both PPLI and MGM stocks have fallen 8% year-to-date. 

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