Entain shares rose 2.9% in London on Tuesday after People Inc submitted an $18 billion non-binding proposal to acquire MGM Resorts International, fuelling speculation that the media holding company could move to buy out the UK operator’s 50% stake in their US joint venture, BetMGM.
The People Inc Proposal
People Inc, formerly known as IAC, currently holds 26.1% of MGM Resorts, a position built since 2020. On June 1, the company submitted a non-binding cash proposal to MGM’s board at $48.30 per share, representing a 24.1% premium to MGM’s 30-day volume-weighted average price through May 29 and a 10.6% premium to the stock’s most recent closing price. Including debt, the deal values MGM at approximately $18 billion.
On completion, People Inc would hold just over 50.1% of MGM, gaining operational control. Minority investors, potentially including existing MGM shareholders, would hold the remainder. People Inc intends to fund the transaction through a combination of cash on hand, debt, and equity commitments.
MGM Resorts confirmed receipt of the proposal on June 1. Its board, working with financial and legal advisers, will review the offer to determine the course of action that best serves shareholders. MGM shares closed 16% higher at $50.69 in New York on Monday, above the bid price, indicating the market views the opening figure as a starting point rather than a final number.
Barry Diller, People Inc chair and a sitting MGM board director, confirmed he will recuse himself from any board deliberations on the proposal.
“We began investing in MGM nearly six years ago because we believed it represented a rare kind of business: one with real world assets that AI cannot easily replicate or disintermediate and exceptional digital growth opportunities. That conviction has only strengthened over time,” said Barry Diller, People Inc chair.
BetMGM and the Entain Position
Entain holds a 50% stake in BetMGM alongside MGM Resorts. The JV is one of the three largest online sportsbooks in the United States, competing with FanDuel and DraftKings. BetMGM raised its full-year 2025 guidance following a strong Q3 and went on to report record $2.8 billion revenue for the full year.
There are no explicit change-of-control provisions in the BetMGM joint venture agreement that would give Entain a right to block a parent-company change at MGM, or compel a new controlling shareholder to bid for Entain’s 50% stake. That point was central to Citigroup analyst Monique Pollard’s research note on the development. Pollard nonetheless expects Entain’s positive share price reaction to persist, given the possibility that People Inc could seek sole control of BetMGM following a successful MGM acquisition, even without being contractually required to do so.
Analyst Views
Deutsche Bank analyst Richard Stuber maintained a buy rating on Entain with a 1,028 pence price target following the bid announcement, implying more than 75% upside from Tuesday’s close of 579 pence. Stuber argued the bid provides share price support for Entain through the potential crystallisation of value in the BetMGM partnership.
Analysts at BNP Paribas told the Times that a change of ownership at MGM could accelerate management ambitions to fully consolidate BetMGM. Morgan Stanley similarly flagged that any ownership change at the parent level raises the prospect of a follow-on transaction affecting the joint venture.
Jefferies took a more cautious position on the primary bid, noting MGM management has consistently argued the company trades below its intrinsic value and flagging uncertainty over willingness to engage with the proposal.
US Gaming M&A Context
The People Inc proposal arrived days after Fertitta Entertainment signed a definitive $17.6 billion agreement to acquire Caesars Entertainment, the largest deal in US gaming in several years. Jefferies analyst David DeCree identified Entain, PENN Entertainment, and Melco Entertainment as publicly traded operators that remain undervalued in current markets, flagging both bids as a potential catalyst for broader sector consolidation.
For Entain, the timing adds corporate activity into a picture already under pressure. The company estimated a £200 million annual impact from UK gambling duty increases announced in the November 2025 budget, covering both online casino and sports betting rate rises. Against that backdrop, any development that brings the BetMGM stake closer to a valuation event carries material significance for shareholders.
MGM’s board response remains pending. No formal offer has been made. People Inc confirmed it reserves the right to withdraw or modify the proposal at any time. The next material development depends on how MGM’s board responds to the non-binding approach.
Source: Alliance News
