MGM Weighs People Inc Takeover Bid, Day After Diller U-Turn

MGM Resorts International (NYSE: MGM) is discussing a possible People Inc takeover bid, according to the Wall Street Journal – a startling reversal that comes barely a day after Barry Diller’s People Incorporated (NASDAQ: PPLI) walked away from its own roughly $18bn offer for the rest of the casino operator. The report, corroborated by Reuters, has effectively swapped predator and prey inside 24 hours.

The mechanics explain why this isn’t as far-fetched as it sounds. People Inc, the publishing group formerly known as IAC, is MGM’s largest shareholder, holding a stake of roughly 27% worth close to $2.5bn. That means MGM buying People would, in effect, be MGM buying back a large chunk of itself while picking up a stable of magazine titles – People, Food & Wine, Southern Living and the Daily Beast among them – as a by-product.

A conglomerate discount too big to ignore

The valuation gap is the crux of the story. People Inc’s own market capitalisation is only around $2.7bn, against MGM’s roughly $8.5bn – meaning the market is pricing People’s entire publishing business, beyond its MGM stake, at almost nothing. That’s the textbook definition of a conglomerate discount: investors refusing to give a holding company full credit for the sum of its parts. For MGM, folding People into itself would be a way of retiring its biggest shareholder’s stake and absorbing the media assets essentially for free, at least on paper.

Diller began assembling his MGM position back in 2020, when pandemic closures had hammered the shares, as Reuters reporting carried by AOL notes. That patient, contrarian bet is now the fulcrum of a deal that could run in either direction – MGM swallowing People, or nothing happening at all. Neither company has commented publicly, and Reuters was careful to frame this as MGM only weighing whether to proceed, not a signed agreement.

Markets have already reacted

Investors didn’t wait for confirmation. People Inc shares jumped roughly 9% after the bell on the report, and Deadline described the stock as surging on the prospect of the role-reversal bid. MGM’s own shares told a rougher story: the stock closed at $32.60, down 3.21% on the day and off 21% over the past 20 trading sessions, having touched a 20-day low at that same $32.60 print. Volume ran 29% above its 20-day average, consistent with a market still digesting the collapse of Diller’s own approach before pivoting to weigh MGM’s counter-move.

Short interest – the proportion of daily trading volume attributable to short sellers betting the price will fall – has also been climbing through the saga. FINRA’s daily short-sale data show MGM’s short-volume ratio rising from 0.502 on 17 September to 0.665 by 24 September, suggesting bearish positioning built steadily as the Diller situation evolved rather than arriving in a single spike.

The earnings backdrop

Whichever way this goes, MGM’s underlying numbers have been choppy enough to keep the stock sensitive to headlines. The company swung from a net loss of $285.3m in the third quarter of 2025 to net income of $125.1m in the first quarter of 2026 and $292.4m in the second, on quarterly revenue holding steady near $4.45bn, according to its filings with the SEC. That recovery in profitability is part of why Diller’s own $18bn approach – and now MGM’s interest in turning the tables – has landed at a moment when the casino operator’s earnings trajectory, if not its share price, has been improving.

The withdrawn Diller bid itself was reported at close to $18bn for the rest of MGM that People Inc didn’t already own, a figure that underscored how much value the market was putting on Las Vegas Strip assets and MGM’s growing digital-betting arm before that proposal was shelved.

For now, the situation remains fluid. No formal offer for People Inc has been tabled, and any deal would need to clear the obvious governance knot of MGM’s largest shareholder simultaneously being its acquisition target – a structure that would invite scrutiny from independent directors and minority shareholders on both sides of the table. Whether MGM presses ahead, and at what price, is the detail the market will be watching for next.

This article is for information only and is not investment advice or a recommendation to buy or sell any asset. Markets move quickly; figures are correct as sourced at the time of writing. Always do your own research before making financial decisions.