MGM Resorts International on Wednesday announced that it has amended its existing voting agreement with People Inc., which follows People’s withdrawal of its previously announced proposal to acquire the gaming company.
The agreement requires People, Barry Diller, and related entities to vote their MGM shares in line with the board of directors’ recommendation in the event of a sale or change-of-control transaction, subject to certain conditions.
According to the agreement, their combined ownership stake in MGM is capped at 29.9%, restricting additional share purchases beyond that point. People currently owns 27% of MGM’s outstanding shares.
Diller’s People withdrew its $18 billion proposal in September to acquire MGM, but did not provide a specific reason for backing out of the deal.
“We didn’t feel the mix was coming together in the way we have hoped,” Diller said.
MGM has agreed not to adopt defensive measures or actions targeting People and its affiliates, as long as they comply with the terms of the agreement.
“This agreement provides the Board with a clear path to maximize value through share repurchases and a change of control transaction, if applicable, in accordance with the Board’s fiduciary duties,” said Paul Salem, chairman of the MGM Resorts Board of Directors.
“We value People, our largest shareholder, and Barry Diller, an MGM Resorts director, both of whom will continue to help maximize value for all shareholders,” Salem said.
The agreement does not obligate MGM or People and its affiliates to pursue or enter any transaction and none is contemplated. MGM remains committed to executing its operational strategy and acting in the best interests of the company and its shareholders.
