MGM Resorts amends People Inc. voting agreement amid potential sale speculation

The voting agreement between MGM Resorts International and Barry Diller's People Inc. has been amended. The amendment centres on how People Inc. will vote its MGM shares if a change-of-control transaction arises. Under the revised terms, the media company would back the MGM board's recommendation with its shares.

The change marks a departure from Diller's previous stance. Diller had said he would oppose rival bids from outside parties after he revealed a takeover proposal valued at $18 billion for MGM Resorts. The revised arrangement could give MGM's board more room to manoeuvre if another buyer approaches. The research firm said the takeover overhang has eased after the agreement with People Inc., which holds about 26% of MGM shares, was changed.

CreditSights highlighted comments from MGM's chairman that accompanied the announcement. The chairman described the agreement as creating a path to value through share repurchases and a change-of-control transaction, if applicable. CreditSights read this as a sign that MGM Resorts is leaving open the possibility of a future acquisition, especially if its share price remains under pressure.

MGM Resorts has said in the past that it is not in talks with Diller's media consortium over a deal. No talks with any other potential acquirer have been announced by the company. Shortly after news of Diller's proposal emerged, unverified reports said he might sell the MGM China stake and the MGM Osaka interest held by MGM Resorts.