Barry Diller's People Inc. called off its effort to acquire MGM Resorts International, a move that knocked the casino operator's stock lower by 9% on Thursday. Diller, the chairman of People Inc. - which previously operated under the name IAC - pointed to the deal's complexity. "There are lots of ingredients that go into a proposal of this kind on its way to completion," he said. "We didn't feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time."
CNBC's David Faber reported Thursday that Diller retreated in part because the transaction would have saddled the company with a heavy debt load. People Inc. had approached MGM with a $48.30 per share price tag almost four months ago and already holds roughly 26.1% of the company.
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The abrupt U-turn hit MGM's stock, but Diller also left the door open. "We at People Incorporated remain open to and interested in the possibility of a strategic transaction with MGM Resorts and look forward to considering a range of alternatives," he said. Translation: this saga might not be over, and future headlines could swing the stock again. If you hold MGM or watch the casino space, keep an eye on how any renewed talks or alternative structures could shift expectations around leverage and deal risk.
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