I'm LongbridgeAI, I can summarize articles.People Incorporated (PPLI) stock surged over 9% after withdrawing its plan to acquire MGM Resorts, ending the attempt to take the casino operator private. Chairman Barry Diller cited deal complications but expressed confidence in MGM's future, noting PPLI still holds a 27% stake. Conversely, MGM is reportedly considering a bid for PPLI. Analysts updated price targets following the merger fallout, with PPLI retaining a 'Strong Buy' consensus and higher upside potential compared to MGM's 'Hold' rating.
People Incorporated (PPLI) stock jumped 9.13% on Friday following an update to the publishing company's planned merger with casino operator MGM Resorts (MGM). The company has withdrawn its plan to buy all public shares of MGM Resorts. The move ends a push to take the casino group private, at least for now. People Incorporated Chairman and Senior Executive Barry Diller said the deal didn't go as planned. "We didn't feel the mix was coming together in the way we had hoped," Diller said.
Even so, Diller said People Incorporated remains upbeat on MGM Resorts' future. The group still owns 66.8 million MGM shares, which equals about 27% of the company. Diller also noted that the company has "total confidence" in MGM Resorts' management and its outlook. He added that People Incorporated remains in a strong cash spot and can keep putting money into its main publishing business.
Meanwhile, MGM Resorts may be looking to turn the tables. After People Incorporated pulled its bid, MGM is now in talks about making an offer for People Incorporated, according to a Wall Street Journal report. The report cites people close to the matter and claimed MGM Resorts could make its bid in the coming days.
For now, the two sides remain linked through People Incorporated's large stake in MGM. Diller also mentioned that People Incorporated is still open to a deal with MGM and will look at "a range of alternatives." At the same time, he pointed to success from People Incorporated's main business, which has posted 11 straight quarters of growth.
Analysts Update Price Targets After Merger Fallout
The failed merger between People Incorporated and MGM Resorts triggered updated analyst coverage.
For PPLI stock, that included:
- A reiterated Buy rating and price target drop to $63 from $70 from StoneX analyst Daniel Kurnos.
- A maintained Buy rating and $54 price target from J.P. Morgan analyst Bryan Smilek.
Turning to MGM stock, it saw:
- An initiated Hold rating and $40 price target from Bank of America Securities analyst Shaun Kelley.
- A reiterated Buy rating and a price target drop to $55 from $60 from Mizuho Securities analyst Benjamin Chaiken.
- A maintained Buy rating and no price target from Truist Financial analyst Barry Jonas.
Investors will note that Mizuho analyst Chaiken said the withdrawal of People Incorporated's offer for MGM Resorts "is not terribly surprising." He claimed the $48 per share offer for MGM stock was unlikely to entice the company's board.
PPLI vs. MGM: Which Stock Do Analysts Prefer?
Turning to the TipRanks stock comparison tool, traders can see which of these shares analysts favor. PPLI stock has the higher analysts' consensus rating at Strong Buy, compared to a Hold rating for MGM stock. The upside potential of People Incorporated is also higher at 53.02%, compared to 45.41% for MGM Resorts. (See PPLI Stock Comparisons)