Sept 23 (Reuters) – Media mogul Barry Diller’s People Inc and MGM Resorts International on Wednesday announced the withdrawal of People’s proposal to purchase all public shares of the casino operator.
MGM’s shares fell 8% after the bell.
“The Board remains excited to continue to lead MGM Resorts as a standalone company,” said Paul Salem, chairman of MGM’s board.
In June, People, which currently owns an approximately 27% stake in MGM, proposed to buy the remaining stake, valuing it at more than $18 billion. It had offered $48.30 a share in cash for the remaining share.
MGM owns marquee properties that account for roughly 40% of the Las Vegas Strip. However, it has been struggling with sluggish footfalls in Las Vegas, and has relied on growth in its China assets, including Macau, and digital operations in recent quarters.
For Diller, who viewed MGM as undervalued, the increasing stake offered an opportunity for People to diversify beyond the core media business that includes publications such as its namesake magazine and Food & Wine magazine.
“We didn’t feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time,” Diller said.
Diller added that People remains open to and interested in the possibility of a strategic transaction with MGM and looks forward to considering alternatives.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Maju Samuel)
