MGM Resorts Shares Sink 9% After Diller's People Inc. Pulls Bid

MGM Resorts International shares fell 9% on Thursday after Barry Diller's People Inc. rescinded its proposal to buy the casino giant.

The retreat ends, for now, a takeover effort launched nearly four months ago, when Diller's company offered to purchase MGM Resorts for $48.30 per share. People Inc. already holds a roughly 26.1% stake in MGM, giving it significant leverage over the company's direction even without a deal.

Diller, chairman of People Inc. — formerly known as IAC — pointed to the complicated nature of the transaction as the reason for walking away.

"There are lots of ingredients that go into a proposal of this kind on its way to completion," Diller said in the press release. "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."

CNBC's David Faber reported Thursday that Diller backed off the deal in part because of the significant debt load it would have created for the company.

The billionaire left the door open to a future transaction. "We at People Incorporated remain open to and interested in the possibility of a strategic transaction with MGM Resorts and look forward to considering a range of alternatives," he said in the release.

The collapse of the bid comes amid a broader wave of consolidation in the casino sector. Earlier this week, shareholders of Caesars Entertainment approved an offer from billionaire Tilman Fertitta to acquire the company for $17.6 billion. Caesars shareholders will receive $31 per share in cash.

For MGM, the immediate market verdict was sharp: a 9% single-day drop that erased the premium investors had priced in around Diller's $48.30-per-share offer. The stock now trades without a takeover floor, while its largest shareholder retains a 26.1% stake and an expressed willingness to revisit a deal — a combination that keeps MGM firmly in play even after this failed approach.