MGM Resorts Gets $1BN Investment From IAC, Sees Shares Rise

MGM Resorts International, one of the greatest gaming companies in the US, has got the attention of media and technology company Interactive Corporation (IAC) that spent $1 billion to obtain 12% in this gaming giant.

IAC is a New York-based company that is owned and controlled by the billionaire businessman Barry Diller. The firm has bought 59 million MGM Resorts shares at individual prices from $21.92 to $15.38.

The Right Opportunity

The whole deal was divided into 34 transactions between June 9th and August 7th…

…and comes in a time when MGM reported a 91% revenue decline in the latest reported quarter, slashing its dividends to weather the impact of health crisis on its financials. This year so far, company’s shares have sunk over 35%.

Diller was, at first, attracted to MGM’s online gaming business which amounts to a very small portion of the total revenue.

Says Diller: “MGM presented a ‘once in a decade’ opportunity for IAC to own a meaningful piece of a preeminent brand in a large category with great potential to move online.”

He followed the online gaming industry for some time and looked for the opportunity to enter the $450 billion global industry.

IAC, traditionally, builds businesses and splits them into separate companies such as Expedia and Ticketmaster.

New CEO and President

In late July, it was confirmed that William Hornbuckle was named the CEO and President of MGM Resorts international.

Paul Salem, company’s Chairman of the Board of Directors, said that after a thorough national search, the board unanimously concluded that Hornbuckle is the best candidate to lead the company through these challenging times and into a more promising future.

Hornbuckle said that he is especially mindful of the thousands of MGM Resorts employees who have been profoundly impacted by the current circumstances.

Source:

“MGM Resorts shares rise after $1 billion investment from Barry Diller’s IAC”, cnbc.com, August 10th, 2020.