MGM Resorts shares fall 6% after hours as Diller withdraws takeover bid
People Incorporated confirmed the withdrawal in a same-day press release, saying it still holds about 27% of the casino operator's stock.
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Chart: MGM, one-minute prices, three sessions
MGM Resorts shares dropped 6% in after-hours trading Wednesday after People Incorporated said it was withdrawing its offer to buy the rest of the casino operator's stock. The move came after the market's 4pm close, in a press release the company issued at 6:06pm.
"We didn't feel the mix was coming together in the way we had hoped and have decided not to pursue taking the company private at this time," Barry Diller said in the release. He said People Incorporated continues to hold 66.8 million MGM shares, about 27% of the company.
People Inc. first offered $48.30 a share in cash for the rest of MGM on June 1, an unsolicited bid that represented a premium of 24.1% to the stock's 30-day volume-weighted average price and more than 30% to its 90-day average, according to a non-binding proposal MGM filed with the SEC. MGM shares closed up roughly 15% that day, CNBC reported. In the week before the withdrawal, the law firm Bleichmar Fonti & Auld said it was investigating whether the bid breached fiduciary duties to MGM shareholders, Casino.org reported.
The withdrawal removes the takeover premium that had been built into MGM shares since the June offer, leaving the stock to trade again on its own fundamentals rather than the prospect of a buyout.