Barry Diller Bids For the Rest of MGM Resorts

Summary

Barry Diller's firm has made an offer for the remaining 74% of MGM Resorts at $48.30 per share, valuing the company at $18.8 billion. Jody Lurie analyzes the leverage impact, noting that combined debt and operating leases already total $30 billion and the additional financing would raise leverage to 7.5x. She also compares the offer to the Caesars deal and suggests the price might be too low, possibly triggering a bidding war.

• Barry Diller's firm offers $48.30 per share for the remaining MGM Resorts stake.
• The deal would require about $8 billion in new debt financing.
• MGM's leverage would increase to 7.5x from roughly 6x.
• MGM bonds lack change-of-control protections, hurting bondholders.
• The offer may be too low, potentially leading to a bidding war.
• Caesars deal is used as a valuation comparison.
• The industry could become more aggressive with higher leverage.