MGM Caps Its Largest Shareholder's Stake At 29.9% After People Drops Its Takeover Bid
People Incorporated and director Barry Diller must back the board on any sale of MGM, so long as set conditions hold.
MGM Resorts, the casino and entertainment operator, said People Incorporated and director Barry Diller agreed not to push their combined stake past 29.9% of its outstanding common stock, under an amended voting agreement disclosed in an 8-K filed Wednesday. The amendment follows People's withdrawal of its proposal to acquire MGM.
Backing the board on a sale
People, formerly known as IAC, is MGM's largest shareholder. Under the amendment to the April 3, 2026 voting agreement, People, Diller and their controlled affiliates must vote all their shares as the board recommends on a change-of-control deal.
That obligation holds only if conditions are met. The buyer must be unaffiliated with MGM, its directors and executives. The holders must get the same form and amount of per-share consideration as other holders of their class. The deal cannot impose new restrictions on them at the surviving company. People's designated directors must also sit on any board transaction committee, unless they decline or a conflict arises.
If any condition fails, the filing says the holders face no voting restrictions on that transaction.
On other stockholder votes, shares they own above 25.73% of total voting power must be voted the same way as the majority of unaffiliated shares that are voted.
The ownership cap and the defense pledge
The 29.9% cap bars purchases of stock or related derivatives that would lift their combined ownership above that level. A rise caused by MGM's own buybacks is not a breach, provided they buy nothing more while above the line.
In return, MGM agreed not to adopt a shareholder rights plan or other defensive measure designed to work against them, for as long as they comply. The pledge does not cover MGM's statements in a proxy contest they start, or actions aimed at third parties buying a large stake from them. Other terms, including termination provisions, are unchanged.
What the board says it gains
Chairman Paul Salem said the agreement gives the board "a clear path to maximize value through share repurchases and a change of control transaction, if applicable." He called People "our largest shareholder" and Diller a director.
The company's release says the agreement obligates neither side to pursue any transaction and none is contemplated.
MGM runs casino resorts, online gaming and sports betting, including 16 domestic casino properties and two in Macau as of December 31, 2025. It is scheduled to report third-quarter results after the market close Wednesday, according to a Yahoo Finance preview.
MGM's third-quarter report after Wednesday's close is the first scheduled event since the amendment.
