Why Barry Diller Is Willing To Spend $18 Billion On MGM Resorts — And It's Not Just About Casinos

Barry Diller's People Incorporated has submitted a non-binding offer to acquire MGM Resorts International for more than £13.3 billion ($18 billion). After accounting for debt, the equity value stands at roughly £9.2 billion ($12.4 billion), Inc. reported.

The bid, announced on 1 June, landed just four days after Fertitta Entertainment agreed to purchase Caesars Entertainment for £13 billion ($17.6 billion), marking the second major Las Vegas takeover proposal in under a week.

People Inc., formerly IAC, is offering $48.30 (£35.78) per share in cash for the 73.9% of MGM it does not already own, CNBC first detailed. The offer carries a 10.6% premium to MGM's closing price of $43.67 (£32.35) on 29 May, and a 24.1% premium to the stock's 30-day volume-weighted average price. MGM shares surged roughly 15% on the news.

Diller's AI-Proof Thesis

In a letter to MGM's board, Diller framed his interest in terms that would sound more at home in a tech boardroom than a casino floor.

'We began investing in MGM nearly six years ago because we believed it represented a rare kind of business: one with real-world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities,' he said in a statement accompanying the proposal, according to a People Incorporated press release. 'That conviction has only strengthened over time.'

People Inc.'s own balance sheet underscores the timing. In Q1 2026, its MGM holding posted an unrealised gain of roughly £25 million ($34 million), a sharp reversal from more than £240 million ($324 million) in unrealised losses during the same period in 2025, Inc. reported.

MGM's first-quarter 2026 earnings showed record consolidated net revenues of £3.3 billion ($4.5 billion), a 4% year-on-year increase. MGM Digital posted a 43% revenue jump to £136 million ($183 million), driven largely by its LeoVegas subsidiary. BetMGM, MGM's North American online betting venture, grew net revenue by 6% and projects adjusted EBITDA of £222 million to £259 million ($300 million to $350 million) for full-year 2026, with a target of £370 million ($500 million) by 2027.

Las Vegas Strip Under Pressure

The Strip tells a more complicated story. In a letter to People Inc. shareholders earlier this year, Diller described MGM's ownership of nearly 40 per cent of the Las Vegas Strip as 'an entertainment nucleus'. That claim faces headwinds. Las Vegas recorded a 7.5 per cent drop in visitors in 2025 — its steepest annual decline since the pandemic — amounting to roughly 3.1 million fewer arrivals.

Las Vegas net revenues of £1.6 billion ($2.2 billion) grew slightly year-on-year for the first time since the third quarter of 2024. But segment adjusted EBITDAR fell 8% to £555 million ($749 million), squeezed by rising self-insurance costs and the winding down of business interruption proceeds. Lower-end midweek leisure traffic at properties like Luxor and Excalibur also remained soft.

'We continue to believe the market materially undervalues the power and durability of MGM's assets,' Diller said.

People Inc. already holds 26.1% of MGM's outstanding shares and two board seats, one of which Diller occupies. He has pledged to recuse himself from any MGM board deliberations on the proposal. If the deal closes, People Inc. would control just over 50.1% of MGM's equity, and current management, led by CEO Bill Hornbuckle, would remain in place.

A Wave of Casino Consolidation

The bid follows Fertitta Entertainment's £13 billion ($17.6 billion) agreement to take Caesars private, announced on 28 May. That deal would merge Caesars' eight Strip properties with Fertitta's Golden Nugget casinos and Landry's restaurant chain, creating a portfolio of roughly 60 gaming properties.

Together, the two proposals could reshape the Strip's ownership structure within months. MGM Resorts confirmed receipt of the bid and said its board would review the offer with financial and legal advisers. 'MGM Resorts shareholders do not need to take any action at this time,' the company said.

The proposal remains subject to gaming regulatory approvals, competition clearances, and confirmatory due diligence. No timeline has been set for the board's response.