Level 1 — Absolute Beginner
MGM Resorts owns big hotels and casinos. A man named Barry Diller wanted to buy the company.
Barry Diller's company already owns part of MGM. He wanted to buy the rest of it.
The deal would have cost 18 billion dollars. But Barry Diller changed his mind.
He said the deal did not feel right. MGM's stock price went down after the news.
- hotel
- a building where people pay to sleep and stay
- casino
- a place where people play games to try to win money
- buy
- to get something by paying money for it
- company
- a business that sells products or services
- deal
- an agreement between two people or groups
- billion
- a very large number, one thousand million
- stock
- a small piece of ownership in a company that can be bought or sold
- price
- the amount of money something costs
Level 2 — Elementary
Billionaire media executive Barry Diller has withdrawn his company's proposal to purchase the rest of MGM Resorts International, ending three months of negotiations.
Diller's company, People Inc., already owns about 27 percent of MGM Resorts. In June, it offered to buy all the remaining public shares for 48.30 dollars each, a deal valued at around 18 billion dollars.
Diller said in a statement that the details of the proposal never came together the way he had hoped, so he decided not to pursue taking the company private for now.
Following the announcement, MGM Resorts shares fell nearly 10 percent, dropping to about 34.20 dollars.
- billionaire
- a person who has at least one billion dollars
- executive
- a senior manager who helps run a company
- withdraw
- to take back an offer or proposal
- purchase
- to buy something
- public share
- a piece of a company that anyone can buy on the stock market
- private
- owned by a small group instead of being traded openly by the public
- statement
- an official announcement, spoken or written
- pursue
- to continue trying to achieve something
Level 3 — Intermediate
Barry Diller's People Inc., which holds roughly a 27 percent stake in MGM Resorts International, has rescinded its proposal to acquire the remaining publicly traded shares for approximately 18 billion dollars, closing out three months of negotiations.
The original offer, floated in June, valued MGM's outstanding shares at 48.30 dollars apiece, a premium intended to persuade the board to take the hospitality and gaming giant private.
In a statement, Diller acknowledged that the elements needed for a successful transaction never fully aligned, adding that People remains open to a future deal but is not pursuing one at this time.
Investors reacted sharply: MGM shares tumbled nearly 10 percent to close around 34.20 dollars, reflecting concern that the premium once implied by the bid has now evaporated.
- stake
- a share or interest in a company or venture
- rescind
- to officially cancel or withdraw an offer, law, or agreement
- acquire
- to buy or obtain something, especially a company
- publicly traded
- describing shares that can be bought and sold by the general public on a stock exchange
- premium
- an amount of money added above the usual or expected price
- hospitality
- the business of providing lodging, food, and entertainment to guests
- transaction
- a business deal or exchange
- evaporate
- to disappear gradually, used here to mean a financial benefit has vanished
Level 4 — Advanced
Barry Diller's People Inc., the holding company that emerged from the rebranded IAC and retains a roughly 27 percent stake in MGM Resorts International, has formally rescinded its approximately 18 billion dollar bid to take the casino and hospitality operator private, drawing a line under three months of closed door negotiations.
The proposal, unveiled in June at 48.30 dollars per share, a premium designed to entice MGM's board and public shareholders alike, would have consolidated the sprawling Las Vegas and regional gaming empire under Diller's direct control.
In a terse statement, Diller conceded that the mix of financial and structural terms never coalesced to his satisfaction, while pointedly leaving the door ajar to a future transaction rather than foreclosing the possibility entirely.
The market's verdict was swift and unambiguous: MGM shares shed nearly 10 percent, retreating to roughly 34.20 dollars, as investors recalibrated expectations that had been inflated by months of speculation over an imminent go private transaction.
- holding company
- a company that owns shares in other companies to control them
- consolidate
- to combine separate things into a single, more unified whole
- sprawling
- spreading out over a large area in an irregular way
- coalesce
- to come together to form one whole
- terse
- brief and to the point, sometimes abruptly so
- foreclose
- to rule out or prevent a future possibility
- unambiguous
- having only one clear meaning; not open to more than one interpretation
- recalibrate
- to adjust or rethink expectations or calculations