MGM’s bet on People has long, strange odds

MGM Resorts International

25/09/2026 16:33

The author is a Reuters Breakingviews columnist.  The opinions expressed are her own.
By Jennifer  Saba
NEW YORK, Sept 25 (Reuters Breakingviews) - MGM Resorts International MGM.N might be making a weird bet on People PPLI.O. The casino operator is mulling a deal to buy Barry Diller’s magazine publisher, the Wall Street Journal reported on Thursday citing sources familiar with the matter. The strategy has a bit of logic yet it is a tortured path to get value.
It started back in the pandemic. Diller’s conglomerate, then known as IAC, bought a stake in MGM for $1 billion in 2020 when the stock had plummeted to around $19 per share. He correctly wagered on a comeback. Today People’s 27% slice of MGM is worth around $2.3 billion.
In June, Diller offered to take the whole company private with a proposal to buy the rest of MGM for $48.30 per share in cash. On Wednesday, he pulled the bid citing they “didn’t feel the mix was coming together.” Now, MGM is thinking about the turning the tables and buying People.
That’s one way, albeit an unlikely way, for boss William Hornbuckle to buy back the stake at a decent enough price. People, which publishes the eponymous magazine, Food & Wine, the Daily Beast and is a major backer in car sharing service Turo, has a market value of $2.7 billion, based on Thursday’s share price. Add net debt, and the enterprise is worth $3 billion. It implies that most of People’s worth is wrapped up in the MGM stake.
Aside from providing MGM guests with complimentary room copies of People, there are few benefits or synergies to owning a clutch of magazines. Sure, the rump could be spun out – a financial device favored by Diller himself. But that seems like a lot of effort for what is essentially a convoluted share buyback.
Diller is a canny complex dealmaker himself. His empire is a constant whirl of incubation and separations including Expedia and Match. People has just beat the S&P 500 .SPX for the past 20 years with an annualized 14% total return versus 11% for the broader market. That means some sort of deal, and potentially an overly intricate one, might still appear at the casino.
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CONTEXT NEWS
MGM Resorts International is mulling an offer for People Inc, according to a September 24 report in the Wall Street Journal, citing people familiar with the matter. People, the owner of the eponymous magazine, has a 27% stake in MGM.
On September 23, People dropped its proposal to buy the rest of MGM for $48.30 per share in cash.

(Editing by Robert Cyran; Production by Pranav Kiran)
((For previous columns by the author, Reuters customers can click on SABA/jennifer.saba@thomsonreuters.com))