MGM Resorts International and its largest shareholder, Barry Diller’s People Inc., have reached a voting and ownership agreement, the company announced Wednesday morning, about a month after Diller dropped his bid to take the Las Vegas casino giant private.
What the agreement says
Under the deal, Diller and People Inc. agreed to cap their combined ownership of MGM at 29.9%. People already holds roughly 27% of the company’s stock, according to News 3.
The two also agreed to vote in line with MGM’s board recommendations on any potential change-of-control transaction, subject to certain conditions. In return, MGM agreed not to take defensive measures aimed against Diller or People Inc. as long as they stay in compliance with the agreement.
The agreement does not require either side to pursue a transaction, and no deal is currently under consideration, according to the announcement. Diller also sits on MGM’s board of directors.
MGM board chair Paul Salem said the agreement gives the board “a clear path to maximize value through share repurchases.”
How we got here
Earlier this year, Diller and People Inc. made an unsolicited offer to buy a controlling stake in MGM and take the company private, in a proposal that valued MGM at about $18 billion. Diller withdrew the offer in September, saying the terms had not come together as hoped.
The move came as the Strip’s other giant is changing hands: Caesars Entertainment shareholders approved Fertitta Entertainment’s $17.6 billion deal to buy the company last month.
MGM was also set to release third-quarter earnings and hold an analyst call later Wednesday.
What it means for locals and visitors
For now, nothing changes at MGM’s Las Vegas resorts, which include MGM Grand, Bellagio, Aria and Mandalay Bay. The agreement keeps MGM publicly traded with no sale on the table, and it caps how much more of the company Diller can buy. With the Strip’s two largest operators both going through ownership shake-ups, workers and regulars will want to watch MGM’s third-quarter results and any comments about Las Vegas visitation, room rates and staffing.