Share prices of MGM Resorts witnessed a 14% rise after IAC/Interactive announced that it had bought a 12% stake for an aggregate of $1 billion.
MGM’s share rose to $21.64 in midday trading on Monday, while IAC (IAC) slipped 1.3% to $131.31.
MGM chairman Paul Salem said: “IAC’s family of brands and digital expertise are a great complement to the direction MGM (MGM) 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.”
“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 IAC chairman Barry Diller. “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.”
Diller believes that “MGM could be one of the largest direct marketers on the internet as online gaming grows, and online direct marketing is an area IAC know well. Furthermore, IAC sees additional opportunities beyond gaming for theatrical onsite activities, including in the regional casinos, as well as the potential for expansion into new worlds of media.
MGM shares had fallen 35% this year following the Covid 19 restrictions.