MGM Resorts International could eventually sell its 56 percent stake in MGM China and its interest in the MGM Osaka project in Japan if People Inc.’s proposed takeover of the US casino operator is completed, according to analyst reports following the non-binding offer.
People Inc., formerly IAC, has proposed acquiring the MGM shares it does not already own for $48.30 per share in cash. The company is MGM’s largest shareholder, with a 26.1 percent stake, and expects to own just over 50.1 percent of MGM after the transaction, with the remainder held by minority investors.
Seaport Research Partners said the bid appears genuine but may be too low at the current price. MGM closed at $50.69 after the proposal, 4.9 percent above the offer, suggesting investors expect a higher price. Seaport said ‘the bid price seems low’ when considering MGM China, the Osaka project and MGM’s 50 percent interest in BetMGM.
CBRE Equity Research took a more constructive view on deal completion, saying it believes the take-private transaction ‘will get done,’ potentially at a ‘slightly higher price’ than the initial proposal. CBRE downgraded MGM to Hold and raised its price target to $50 from $49.
MGM China’s future becomes central
MGM China is likely to become one of the most closely watched assets if People Inc. gains control of MGM Resorts. Seaport said MGM China and the Japan project would be the two most prominent ‘non-core’ assets under a People-owned MGM, as Barry Diller could seek to reduce MGM’s global bricks-and-mortar footprint and focus more on digital gaming.
CBRE estimated MGM’s stake in MGM China at $3.3 billion, with the Macau business contributing about $316 million in annual cash flow, including $201 million in dividends and $115 million in management fees. It said People could, over time, divest all or part of the MGM China stake to help finance the proposed acquisition, fund the Osaka equity commitment, or return equity to minority partners.
Seaport described Pansy Ho, chairperson of MGM China and holder of more than 24 percent of the company, as ‘the natural buyer’ for the Macau stake. However, the firm said she would likely need partners to acquire MGM’s 56 percent holding. One possible structure would allow Ho and partners to build a 50.1 percent stake while maintaining MGM China’s Hong Kong listing and leaving a 49.9 percent public float.
If MGM China were sold outright, Seaport said Galaxy Entertainment Group and Sands China are the only existing Macau concessionaires with the financial capacity to buy the company. Galaxy could be more likely to receive approval because it is a local operator with ample liquidity and a need for additional tables. Sands China also has the balance sheet capacity, but Seaport said an acquisition by Sands could be more problematic for the government because it would further increase the operator’s scale in Macau.
A sale to a third-party buyer is also possible, but Seaport said any buyer would likely need to be Chinese or a friendly Asian investor approved by the Macau and Chinese governments. The 2032 concession renewal was identified as a major hurdle for any new buyer.
Seaport also upgraded MGM China to Buy from Neutral, with a price target of HK$14.30 ($1.83). The firm said MGM China has retained market share in the high 15 percent to low 16 percent range and is expected to deliver a strong second quarter.
Osaka stake also under review
MGM’s Japan exposure could also come under review in a successful People Inc. takeover. Seaport said MGM could likely find a buyer for its 42.5 percent stake in the Osaka integrated resort project, although it noted that contractual details around replacing MGM as developer remain unclear.
The firm identified Las Vegas Sands, Galaxy and Hard Rock as potential buyers with the capital and development experience to suit the government and MGM’s Japan partner. Wynn Resorts, Genting and Melco Resorts & Entertainment could also be interested, but Seaport noted each faces liquidity constraints or commitments to other projects. It also said current China-Japan political tensions could limit appetite from Chinese investors.
CBRE Credit Research said MGM’s funding structure remains an important consideration, with ‘material unknowns’ including whether the offer will be accepted, whether higher bids emerge and what the financing package will look like. It also noted that MGM’s Japan capex will be nearly $400 million in 2026 and almost $1 billion annually in 2027 and 2028, before potential offsets such as non-core asset sales or higher dividends from MGM China.
For Macau, Seaport said a sale to an existing concessionaire could bring ‘some rationalization of competitive behavior,’ including lower promotional activity, player reinvestment and commissions. Such consolidation, it said, would be positive for the broader Macau market and all operators.
