MGM ends People Inc takeover talks and signs amended voting deal as Q3 losses narrow to $17M
MGM Resorts' CEO said buyout discussions with largest shareholder People Inc are finished, and the two agreed a cap of 29.9% on People's stake. Q3 revenue fell 1% to $4.2B while net loss shrank to $17M.
GamblingSource: iGaming Business
MGM Resorts has confirmed that discussions about a deal with its largest shareholder, Barry Diller's People Inc, are over in either direction. CEO Bill Hornbuckle told analysts on the third-quarter call that neither side is considering acquiring the other and that the company will refocus on its own business.
People made an offer on 1 June to buy the 74% of MGM shares it did not own at $48.30 per share. It withdrew that proposal on 23 September, after which reports suggested MGM might bid for People instead. Alongside its results, MGM announced an amended voting agreement. People will not hold more than 29.9% of MGM and will vote its shares in line with the board's recommendation on any change of control transaction. MGM, in turn, agreed not to take defensive measures designed to be adverse to People and Diller.
Group revenue for the quarter was $4.2 billion, down 1% year over year, while adjusted EBITDA dropped 20% to $403 million. Net loss narrowed from $285 million to $17 million, or $0.07 per share. The stock fell 2.5% on Wednesday to close at $27.27, having topped $50 in June amid the takeover speculation. It is down 25% this year.
Las Vegas revenue declined 2% to $2 billion and segment adjusted EBITDAR fell 12% to $531 million. Room rates and revPAR both slid 8%, although table games win rose 17% to $363 million. An analyst noted revPAR has now fallen for eight consecutive quarters. Hornbuckle pointed to weaker international and Canadian travel and said he expects a better fourth quarter.
Regional revenue fell 8% to $883 million and adjusted EBITDAR dropped 18% to $243 million, with slot win down 11%. The segment could benefit from a planned 6,000-seat Sphere venue near the National Harbor casino in Maryland. Prince George's County Council approved up to $215 million in public financing for the $1.4 billion project, which is expected to open in 2030.
MGM China set a quarterly revenue record of $1.1 billion, up 5%, and a record market share of 17%, though adjusted EBITDAR fell 7% to $264 million. Hornbuckle said the MGM Osaka project is about 11% complete and remains on time and on budget for a 2030 opening.
Based on reporting by iGaming Business.