MGM Resorts takeout price appears to be too low; may be worth $50-55/shr - analyst

[MGM Resorts International]
PaulMaguire

Barry Diller's $48.30/share offer [https://seekingalpha.com/news/4598872-mgm-resorts-rallies-after-diller-bid-casino-ma-has-other-stocks-moving] for MGM Resorts (MGM [https://seekingalpha.com/symbol/MGM]) appears too low and may be rejected by the casino operator's board, according to a Stifel analyst.

MGM Resorts (MGM [https://seekingalpha.com/symbol/MGM]) may be worth $50-55 a share based on Tilman Fertitta's recently announced purchase of Caesars Entertainment [https://seekingalpha.com/news/4597812-casino-ma-caesars-entertainment-agrees-to-buyout-offer-from-feritta-entertainment] (CZR [https://seekingalpha.com/symbol/CZR]) for $31 a share, according to Stifel analyst Steven M. Wieczynski, who has a buy rating on MGM.

"We think it is possible that MGM’s Board rejects this initial offer and seeks a higher takeout premium," Wieczynski wrote in a note on Monday. "As we said previously following the CZR deal, we think MGM should be worth at least $50-55 based on CZR's valuation."

MGM's shares jumped 17%, on news of the offer from Diller's People Inc. (IAC [https://seekingalpha.com/symbol/IAC]), trading over $51/share, an indication that investors believe that a higher bid may be coming.

"Fertitta’s $31/ share offer price represented a ~7.2x 2027E EBITDAR multiple for CZR’s diversified portfolio of assets, while Barry Diller’s bid for MGM came in just a half turn higher," Wieczynski added "We think this is way too conservative as we believe the higher quality of MGM’s luxury assets as well as favorable demographic positioning (Macau exposure, LV Strip high-end) and attractive growth pipeline (Japan IR) should warrant a greater relative valuation premium."

Wieczynski noted that he struggles to find “credible” strategic buyers that could come "over the top" and he believes that potential private equity buyers may be deterred by People's ~26% voting right and instead may want to get involved via the People offer.

MGM Resorts (MGM [https://seekingalpha.com/symbol/MGM]) confirmed in a statemen [https://seekingalpha.com/pr/20535341-mgm-resorts-international-confirms-receipt-of-acquisition-proposal-from-people-incorporated]t on Monday that it received the offer from People (IAC [https://seekingalpha.com/symbol/IAC]) and will carefully review it.

MORE ON MGM RESORTS

* MGM: Better Vegas Trends Give The Stock Room To Run [https://seekingalpha.com/article/4910574-mgm-better-vegas-trends-give-the-stock-room-to-run]
* MGM Resorts: Finally, Las Vegas Tourism Is Stabilizing [https://seekingalpha.com/article/4909595-mgm-resorts-finally-las-vegas-tourism-is-stabilizing]
* MGM Resorts International (MGM) Q1 2026 Earnings Call Transcript [https://seekingalpha.com/article/4896216-mgm-resorts-international-mgm-q1-2026-earnings-call-transcript]
* MGM Resorts rallies after Diller bid; casino M&A has other stocks moving [https://seekingalpha.com/news/4598872-mgm-resorts-rallies-after-diller-bid-casino-ma-has-other-stocks-moving]
* MGM Resorts gains on report Barry Diller to make $18B bid [https://seekingalpha.com/news/4598839-mgm-resorts-gains-on-report-barry-diller-to-make-18b-bid]