Shares of sports-betting and gambling operator Entain rose by more than 3% on Tuesday amid renewed market attention on the ownership structure of BetMGM, after People Incorporated announced a proposal to buy the remainder of MGM Resorts International that it does not already control.
People - the company formerly known as IAC - said it submitted a non-binding offer to MGM’s board to acquire all outstanding MGM shares it does not currently own for $48.30 per share in cash. People already holds a 26.1% stake in MGM’s outstanding common stock.
In its filing, People said the cash proposal equates to a 24.1% premium to MGM’s 30-day volume-weighted average price through May 29, is more than a 30% premium to the 90-day volume-weighted average price, and represents a 10.6% premium to the stock’s most recent closing price.
Market reactions included notable price moves across related tickers, with IAC up 1.09%, MGM jumping 16.08% and ENT advancing 3.78% as investors priced in the implications of the proposed transaction.
Analysts at Morgan Stanley highlighted that any alteration in MGM’s ownership could increase the likelihood of a subsequent transaction involving BetMGM, the U.S. digital sports-betting joint venture co-owned by Entain and MGM. "Any potential change in MGM ownership could raise the possibility of a follow-on transaction regarding the JV, on the logic that it could increase the owned digital operations and potentially accelerate multichannel delivery," the brokerage wrote.
The bank added that separating the Entain platform is technically feasible under certain circumstances. As part of its analysis, Morgan Stanley projects BetMGM to generate EBITDA of $451 million by 2027 and applies a valuation of 250 pence to BetMGM in its methodology.
In a letter to MGM’s board, People’s chairman and senior executive Barry Diller argued that MGM’s portfolio of assets and operating businesses are "not currently realizing their full potential in the public markets," and set out a plan to take the company private.
People said it expects to fund the proposed purchase with a mix of cash already held by People and MGM together with additional debt and equity commitments. The company indicated it would own just over 50.1% of the equity of the company after closing, with other investors retaining minority stakes.
People also stated that the transaction would not be conditioned on financing and that MGM’s existing management team would remain in place to run the business after closing.
The announcement has prompted fresh speculation about strategic options for BetMGM, reflecting how a change in MGM’s ownership structure could affect joint-venture dynamics and digital sports-betting distribution. Market participants and sector analysts are weighing technical feasibility and potential valuation scenarios, while investors in gambling and gaming names revisit positions in response to the takeover proposal.