MGM Resorts shares tumble after Diller's People withdraws $18 billion bid
MGM•MGM Resorts shares fell 10% after Barry Diller's People Inc. withdrew its more than $18 billion proposal to buy the casino operator. People had offered $48.30 per share for the remaining shares in June and already owned 27% of MGM.
1. Bid withdrawal hits shares
MGM shares fell 10% on Thursday after People Inc. withdrew its proposal, wiping out gains made since the offer was announced in June. At $34 in premarket trading, the stock was on track for its lowest open in seven months if losses held.
2. Analysts assess the offer
Analysts said they were not surprised by the withdrawal, noting investor enthusiasm had waned as MGM shares fell 27% from their June 18-year high through the last close. Mizuho analysts wrote that they did not believe a $48-per-share bid would entice MGM's board, and saw little appetite from People to raise it materially. Truist Securities said the drop could reflect event-driven investors exiting.
3. Company cites deal mix
People did not give a specific reason for withdrawing. Diller said, “We didn't feel the mix was coming together in the way we had hoped.” MGM's U.S. market has faced sluggish footfalls, while its digital operations and China assets, including Macau, have performed well; its properties account for roughly 40% of the Las Vegas Strip.
