MGM Resorts International shares rose after markets reopened Monday following a report published after Friday's close that the casino operator is engaged in discussions regarding an acquisition proposal from Barry Diller.
According to the report, Diller submitted an offer on June 1 to buy the remaining 26% of MGM he does not already own at a price of $48.30 per share. If completed at that price, the transaction would place a valuation on MGM of roughly $12.4 billion.
The company has created a special board committee and engaged external advisers to evaluate the proposal, the report said. Diller's holding vehicle, People Inc., already has a stake in MGM, which operates properties such as Bellagio and Mandalay Bay.
Bankers from JPMorgan Chase & Co. are reported to be assisting Diller on the prospective acquisition and are working to secure financing for the offer. The initial story surfaced after the trading day ended on Friday, and MGM shares moved higher when trading resumed on Monday, reflecting the market's reaction to the news.
The details released in the report confined the timeline and the terms to the June 1 proposal and the structure put in place by MGM's board to assess the potential deal. Beyond the formation of the board committee and the involvement of advisers and JPMorgan bankers on Diller's side, the report did not provide further outcomes or commitments.
Investors responded to the information by bidding the stock higher at the reopening of markets, lifting the share price in intraday trading on Monday. The report ties together the mechanics of a potential takeover offer - a specified per-share price, a board-level review process and third-party financing efforts - without indicating that an agreement has been reached.
Contextual note: The report cited the June 1 offer and the board's subsequent steps to evaluate that proposal. No additional transactions, approvals or closing conditions were described in the information released.