The Las Vegas Strip is facing a wave of consolidation unlike anything seen in a generation, with two major casino takeover deals announced in the span of days that could fundamentally reshape the American gaming industry.
Media mogul Barry Diller’s holding company People Incorporated — formerly known as IAC — submitted a non-binding proposal Monday to acquire all outstanding shares of MGM Resorts International it does not already own for $48.30 per share in cash, valuing the casino giant at approximately $18.8 billion including debt. People Incorporated currently owns 26.1 percent of MGM’s outstanding common stock and holds two board seats, giving Diller significant leverage over any competing bidder. The offer represents a 10.6 percent premium over MGM’s most recent closing price and a 24.1 percent premium over its 30-day volume-weighted average price.
Diller said he began accumulating MGM shares during the COVID-19 pandemic, when the company’s stock was battered by casino closures and travel restrictions, and has since grown convinced the market materially undervalues MGM’s physical assets. MGM owns marquee Las Vegas Strip properties including the Bellagio and Mandalay Bay, accounting for roughly 40 percent of Strip real estate.
The MGM bid comes just days after hospitality billionaire Tilman Fertitta’s Fertitta Entertainment reached a $17.6 billion agreement to acquire Caesars Entertainment, offering shareholders $31 per share in cash — a 49 percent premium over Caesars’ unaffected share price before takeover rumors surfaced in late February. The Caesars deal includes a go-shop period through July 11, during which Caesars may solicit and consider alternative proposals.
Together the two deals would take two of the three largest casino operators in the United States private, concentrating an enormous share of Las Vegas Strip real estate in the hands of a small number of private investors. Analysts at JP Morgan have warned the removal of Caesars as a publicly traded pure-play gaming stock could increase volatility for remaining public operators, while separately noting that the Caesars takeover price implies MGM shares are significantly undervalued — a dynamic that may have accelerated Diller’s move.
If completed, People Incorporated would own just over 50.1 percent of MGM’s equity, with minority investors — potentially including existing MGM shareholders — holding the remainder. Diller said MGM’s current management team is expected to remain in place. MGM did not immediately respond to requests for comment.