Shares in Barry Diller‘s People Inc. surged 9% in early trading Friday after a report of an unusual role-reversal acquisition bid from MGM Resorts.
Earlier this week, People said it was dropping its $18 billion plan to acquire full control of MGM Resorts, in which it already holds a 27% stake. The overture was made last June. In addressing the decision to step back, Diller dropped a hint, saying that People remained “open to and interested in the possibility of a strategic transaction with MGM Resorts and look forward to considering a range of alternatives.”
The Wall Street Journal on Thursday night reported that the tables had turned. The parties see upside in a merger, according to the report, because both companies’ shares have been undervalued and People’s stable of lifestyle magazines like Food & Wine could complement the hospitality offerings of MGM.
People rebranded from IAC, the digital company Diller founded in 1995. After making his mark on the traditional media business with historic runs at Fox and Paramount, Diller turned toward digital, assembling a portfolio of businesses across verticals. More recently, IAC acquired Dotdash and then Meredith, which more than a decade ago had bought People and other former Time Inc. titles.
MGM Resorts is a major casino operator in Las Vegas, known for properties like the Bellagio, The Cosmopolitan and MGM Grand. The casino sector is in the midst of a consolidation wave, with Caesars Entertainment in the midst of being acquired by Golden Nugget owner Tilman Fertitta for $17.6 billion. Fertitta also has a stake in another major Vegas-based entity, Wynn Resorts.
Neither company has officially confirmed the WSJ report. MGM Resorts shares were down 3% in morning trading on Friday. They fell 10% after People’s withdrawal of its bid. .
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