MGM reportedly weighs a deal for People with long, strange odds
MGM•MGM Resorts is reportedly mulling an offer for People Inc, which owns a 27% stake in MGM. People recently withdrew its proposal to buy the rest of MGM for $48.30 per share in cash.
1. Potential deal
MGM Resorts is considering an offer for People Inc, which publishes People and Food & Wine, owns the Daily Beast and is a major backer of car-sharing service Turo. People’s 27% stake in MGM was worth about $2.3 billion, while People had a market value of $2.7 billion and an enterprise value of $3 billion.
2. Earlier proposal withdrawn
People proposed in June to buy the rest of MGM for $48.30 per share in cash, then withdrew the bid on Wednesday, saying the parties “didn’t feel the mix was coming together.” The column said buying People could let MGM buy back its stake, but noted there are few benefits to MGM owning People’s magazines.
3. Returns and dealmaking
People returned 14% annually over the past 20 years, compared with 11% for the S&P 500, according to the article. It said a deal could still emerge, potentially involving a separation of People’s other businesses.
