MGM Resorts takeover talks with Barry Diller's People Inc end
MGM Resorts and its largest shareholder Barry Diller's People Inc have ended takeover discussions, with People rescinding its $48.30 per share offer.
Takeover talks between MGM Resorts and its largest shareholder Barry Diller’s People Inc are over, and neither company is considering acquiring the other.
MGM received a blockbuster offer from People on 1 June to buy out the 74% of shares it doesn’t already own at $48.30 per share. People rescinded the offer on 23 September.
Amended voting agreement
MGM and People agreed to an amended voting agreement where People agreed not to exceed 29.9% ownership of MGM and pledged to vote all of its shares “in accordance with the board’s recommendation in connection with a change of control transaction.”
MGM stock lost 2.5% in trading on Wednesday and closed at $27.27. Overall, MGM is down 25% this year and 42% over the last five years.
Q3 financial results
In Q3, MGM posted $4.2 billion in group revenue, a 1% decrease year-over-year. Group adjusted EBITDA slid 20% YoY to $403 million. The operator pared its net losses from $285 million a year ago to $17 million in the current quarter, while losses per share also shortened from $1.05 last year to $0.07 this year.
MGM’s Las Vegas revenue declined 2% to $2 billion while segment adjusted EBITDAR fell 12% to $531 million. Average daily rates and revenue per available room (revPAR) both declined 8% while casino revenue was up markedly thanks to a 17% spike in table games win ($363 million). MGM’s Las Vegas EBITDAR over the trailing 12 months is 70% higher than what the company posted for the full year in 2019.
Regional revenue was $883 million, -8% YoY, while segment adjusted EBITDAR decreased 18% to $243 million. Overall casino revenue fell 10%, mainly attributed to an 11% slide in slot win.
International operations and capital position
MGM China posted a new quarterly revenue record of $1.1 billion, which represented a 5% increase over the prior-year period. The operator’s market share finished the quarter at 17%, also a new record, though segment adjusted EBITDAR fell 7% to $264 million.
MGM ended the quarter with $2.3 billion in cash against total long-term debt of $5.6 billion. The company has more than $1 billion remaining in stock buy-back authority but did not repurchase any shares in Q3 amid the various acquisition talks.
Sources
- iGaming Business · Industry media · primary source ·
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