The biggest and most emphatic takeaway from MGM Resorts’ third-quarter results and conference call on Wednesday is that takeover talks between MGM and its largest shareholder, Barry Diller’s People Inc, are over, and neither company is considering acquiring the other.
MGM received a blockbuster offer from People on 1 June to buy out the 74% of shares it doesn’t already own at $48.30 per share, which the operator spent months considering. Ultimately, People rescinded the offer on 23 September and reports emerged afterward that MGM could acquire People instead. That is no longer a possibility, MGM CEO Bill Hornbuckle told analysts.
“We’re going to refocus on our business, the dialogue back and forth between us and People on you-buy-us, we-buy-you… we’re done, and that’s our position and that’s People’s position,” he said.
On Wednesday, prior to the call, MGM announced that the two sides had agreed to an amended voting agreement. People agreed not to exceed 29.9% ownership of MGM and pledged to vote all of its shares “in accordance with the board’s recommendation in connection with a change of control transaction”, per a release. In exchange, MGM agreed “not to take defensive measures or actions designed to be adverse” to People and Diller.
In Q3, MGM posted $4.2 billion in group revenue, a 1% decrease year-over-year, while group adjusted EBITDA slid 20% YoY to $403 million. The operator pared its net losses from $285 million a year ago to $17 million in the current quarter, and losses per share also shortened from $1.05 last year to $0.07 this year.
MGM stock lost 2.5% in trading on Wednesday and closed at $27.27. After the takeover speculation sent shares over $50 in June, they have steadily declined since. Overall, MGM is down 25% this year and 42% over the last five.
Las Vegas top-of-mind
As is typical, analysts were hyper-focused on Las Vegas, which drew the bulk of questions. MGM’s Las Vegas revenue declined 2% to $2 billion while segment adjusted EBITDAR fell 12% to $531 million. These declines were attributed mainly to non-gaming performance, as average daily rates and revenue per available room (revPAR) both declined 8% while casino revenue was up markedly thanks to a 17% spike in table games win ($363 million).
Hornbuckle said in his opening remarks that the market is still performing well from a historical perspective. MGM’s Las Vegas EBITDAR over the trailing 12 months is 70% higher than what the company posted for the full year in 2019, he said. But analysts were seemingly unconvinced, with one participant noting that revPAR has now declined in eight consecutive quarters.
“Undoubtedly, Las Vegas has been hurt more than most (travel markets),” Hornbuckle said in response. “The Canada issue, the international travel issue, has not helped. So we just need to push our way through those things really one at a time.”
MGM has prioritsed its higher-end properties in the market like Bellagio and Cosmopolitan, with the company highlighting capital projects for both in its Q3 investor presentation. Lower-end play, however, has struggled for several quarters in part due to macroeconomic conditions.
“I think over time, we’re going to need relief on fuel, gas and airline pricing as well… but we see a better looking (fourth) quarter then I think we came out of the summer with,” Hornbuckle said.
New Sphere to boost regionals
Regional revenue was $883 million, -8% YoY, while segment adjusted EBITDAR decreased 18% to $243 million. From a gaming perspective, overall casino revenue fell 10%, mainly attributed to an 11% slide in slot win.
COO Ayesha Molino told analysts that the casino underperformance was “material” in Q3 but overall the various properties are “very focused on running those businesses efficiently”.
MGM’s regional segment is poised to benefit from the construction of a new 6,000-seat Sphere entertainment venue in Maryland next to the company’s National Harbor casino. On Tuesday, the Prince George’s County Council unanimously approved up to $215 million in public financing for the venue, which is expected to cost $1.4 billion and open in 2030.
From a balance sheet perspective, MGM ended the quarter with $2.3 billion in cash against total long-term debt of $5.6 billion. CFO Jonathan Halkyard said the company has more than $1 billion remaining in stock buy-back authority but did not repurchase any shares in Q3 amid the various acquisition talks.
Records for MGM China
MGM China posted a new quarterly revenue record of $1.1 billion, which represented a 5% increase over the prior-year period. The operator’s market share finished the quarter at 17%, also a new record, although segment adjusted EBITDAR fell 7% to $264 million.
“There are a lot of factors impacting our margins, like event calendars, high-end play, etc., but we are very focused on our efficiency,” MGM China CEO Kenneth Feng told analysts.
Also in Asia, officials again pointed to the development of MGM Osaka, which is currently the lone casino licence holder in Japan and is working toward a 2030 opening. The project is about 11% complete, Hornbuckle said, and is still on-time and on-budget. He called it the “greatest integrated resort opportunity anywhere on the globe”.
New information in the company’s investor presentation compared the Osaka project to others in the region, most notably Marina Bay Sands in Singapore – Osaka saw more visitors than Singapore in 2025, MGM said, and the casino’s 6,400 projected gaming machines is more than MBS and MGM’s two Macau properties combined.
Jess Marquez
Jess has covered the global gaming industry since 2022. A native of Reno, Nevada, he’d like to note that it’s Ne-va-da, not Ne-VAH-da.