Barry Diller's People Inc. offered to purchase the remaining shares of MGM Resorts International on Monday [1, 2].
The move signals a major bet on physical luxury assets at a time when artificial intelligence is disrupting various sectors of the global economy.
People Inc., formerly known as IAC, proposed a purchase price of $48.30 per share [3]. The company already holds a significant stake in the Las Vegas-based operator, with reports placing its existing ownership at approximately 26% to 26.1% [3].
Reports on the total valuation of the offer vary. Some sources value the company at $12.4 billion [1], while others place the valuation at $18 billion [2].
Diller based the bid on the belief that the public markets have undervalued the company's current assets. He said he specifically highlighted the resilience of the company's physical footprint in the face of technological shifts.
"We believe that MGM's assets and businesses are not currently reflected in their market valuation," Diller said [2].
The offer includes iconic Las Vegas Strip properties, such as the Bellagio. Diller said that these tangible experiences provide a moat against digital disruption.
"MGM's properties, such as the Bellagio in Las Vegas, can't be easily replaced by AI," Diller said [1].
People Inc. is seeking to take full control of the hospitality and gaming giant to capitalize on what it views as an undervalued portfolio of real estate, and entertainment brands [1, 2].
“MGM's properties, such as the Bellagio in Las Vegas, can't be easily replaced by AI.”
This acquisition attempt reflects a strategic pivot toward 'irreplaceable' physical assets. By targeting a high-profile hospitality brand, Diller is hedging against the volatility of digital markets, betting that high-end tourism and physical gaming venues will maintain a premium value that AI cannot replicate.
