New York-based IAC/InterActiveCorp has acquired a 12-percent interest in U.S.-based casino operator MGM Resorts International for an aggregate of about US$1 billion. The acquisition of just above 59 million shares in MGM Resorts was done in tranches “over the last few months,” said the digital media and technology group founded by television mogul Barry Diller.
IAC is to serve as a strategic partner to MGM Resorts, particularly regarding the latter’s online gaming and sports betting businesses, according to a Monday release by MGM Resorts. The new investor has been asked to join the board of directors of the casino group.
Joey Levin, chief executive of IAC, said in a separate release that his company would be “a minority investor” in MGM Resorts.
MGM Resorts is the parent company of Macau-based casino firm MGM China Holdings Ltd.
Paul Salem, chairman of MGM Resorts, said in prepared remarks that the new investor would “bring vast experience in both entertainment and online commerce,” with the casino firm planning to “take full advantage” of such expertise.
“IAC’s family of brands and digital expertise are a great complement to the direction MGM Resorts has been taking both in leveraging our digital assets to enhance our guests’ experience and building a leading iGaming and sports betting business in BetMGM,” stated Mr Salem.
MGM Resorts chief executive, Bill Hornbuckle, was quoted in the release as saying that “IAC’s expertise in growing and expanding brands online” was a “natural fit” for the casino group.
Deutsche Bank Securities Inc said in a Monday memo that the “value of the partnership is likely to stem from IAC’s deep history and expertise in the digital media environment.”
“While unusual for IAC to acquire equity in the public markets, the IAC team believes it is taking a meaningful stake in an early-stage online movement with a prominent brand within gaming,” wrote analysts Carlo Santarelli and Steven Pizzella.
In a letter to its shareholders, IAC referred to the investment in MGM Resorts as “a once in a decade” opportunity.
“What initially attracted us to MGM, besides its leadership in leisure, hospitality and gaming, was an area that currently comprises a tiny portion of its revenue – online gaming,” said Mr Diller, chairman and senior executive of IAC, in a statement.
He added: “IAC’s foundational concept of seeking opportunities to build interactive businesses is our base rationale – there is a digital first opportunity within MGM Resorts’ already impressive offline businesses, and with our experience we hope we can strongly contribute to the growth of online gaming.”
In Monday’s note, Deutsche Bank said: “While the deal does not improve the operating circumstances in Las Vegas or help the near to medium term free cash flow dynamics of the company, it does highlight that MGM does in fact intend to be a major player in the online environment,” added the brokerage’s team.
Apr 16, 2021Macau’s VIP gross gaming revenue (GGR) in the first quarter of 2021 reached nearly MOP9.13 billion (US$1.14 billion), up 19.7 percent sequentially, according to data released on Friday by the...
Apr 16, 2021
Tax revenue collected by the Macau government from the city’s gaming industry in the first three months of 2021