An amended voting agreement between MGM Resorts International (NYSE: MGM) and Barry Diller’s People Inc. (NASDAQ: PPLI) could simplify a future sale of the casino operator while making MGM China a point of emphasis in a change-of-control scenario.
CreditSights recently noted that MGM China faces potential “event risk” if control of its Las Vegas-based parent changes hands. While the research firm called takeover overhang risk “less acute,” it said the revised voting agreement with Diller implies MGM Resorts could be open to a future sale. The U.S.-based parent owns 56% of the operator of MGM Cotai and MGM Macau. The Macau entity could be a source of attraction for a future MGM suitor.
We would also not rule out MGM China’s continued strong operational performance (decent 3Q26 results with a stronger market share and leverage metrics remaining well below pre-pandemic levels) as a positive draw for potential buyers of MGM,” CreditSights noted.
MGM has made it clear it is not conducting talks regarding a transaction with Diller’s media consortium, nor has it stated it is in discussions with another prospective buyer.
Amended Deal Leaves Takeover Door Ajar
One of the primary details in the new MGM-People agreement is that the media conglomerate, which controls approximately 26% of the gaming company’s shares, will pledge those shares “in accordance with the Board’s recommendation in connection with a change-of-control transaction.”
After disclosing an $18-billion takeover bid for the casino behemoth, Diller made clear he would oppose third-party bids. However, that stance shifted under the revised voting agreement – a pivot that could simplify a future sale for MGM Resorts.
“(In) the amended voting agreement release between People Inc. and MGM, MGM’s chairman noted it creates ‘a clear path to maximize value through share repurchases and a change of control (CoC) transaction, if applicable,’ which to us, reads as MGM leaving the door open to another potential acquirer, a possibility that could resurface especially if MGM’s stock price remains depressed,” said CreditSights.
Potential Relief for MGM China
While a possible sale of the Las Vegas gaming giant may introduce event risk for the Macau entity, no transaction is currently on the table. If one does come to pass, it could result in a favorable outcome or more clarity for MGM China.
Soon after Diller made his takeover overture for MGM, unconfirmed reports suggested he wanted to unload the company’s stake in MGM China as well as its interest in MGM Osaka.
Rephrased by The Mystic Gambler