WSJ: MGM Resorts now a possible acquirer of People Inc. (PPLI), reversing roles after People withdrew its MGM takeover proposal; People shares climbed premarket
What happened
The Wall Street Journal reported on Thursday, September 24 that MGM Resorts International is discussing making a bid to purchase Barry Diller's People Inc. (PPLI), reversing the roles from a months-long takeover dance in which People Inc. had tried to buy MGM. The report came a day after People withdrew its June proposal to take MGM private. People Inc. — which owns People magazine, Food & Wine, Southern Living, Investopedia, The Daily Beast and other media brands — holds a ~27% stake in MGM worth roughly as much as its own market cap. MGM could make its proposal in the coming days, though the report noted the talks could still fall apart. MGM did not respond to comment requests; People declined to comment.
Why it matters & what’s next are part of Pro, along with the audio summary.
Start your free 14-day trialWho’s affected & sources
Who’s affected
- PPLI — the takeover target: shares rose ~9% after hours Thursday (other reports cite up to ~13%, trading as high as ~$41 vs a $35.93 close) and climbed in premarket trading on the bid speculation. MGM — the potential buyer, far larger ($8.48B market cap vs People's $2.68B), but People's ~27% MGM stake is worth roughly $2.3B, nearly People's entire market cap, making a deal structurally circular
- MGM shares were little changed in extended hours. The speculation also spiked PPLI call-option volume 2,847% above average on Friday.