MGM Amends Voting Agreement With People, Capping Ownership at 29.9%

Key Facts

MGM Resorts International amended its voting agreement with People Incorporated and Barry Diller on October 27, setting a framework to limit the group’s stake and govern its votes on company matters, according to a filing MGM submitted to the U.S. Securities and Exchange Commission. The agreement covers People, Diller and entities under their control, and dates back to April 3, 2026. The amendment restricts their purchases of MGM shares or related financial instruments if those purchases would push their combined beneficial ownership above 29.9% of outstanding common shares. It also governs their votes on ordinary matters and any future change-of-control transaction, with separate conditions for each. MGM said the agreement does not require either party to pursue or complete a transaction, and no deal is currently under consideration.

Under the amendment, if the securities held by the covered parties exceed 25.73% of total voting power, they must, on matters unrelated to a change of control, vote the excess portion in line with the majority of eligible votes cast by the other shareholders. This provision sets a rule for ordinary matters, but does not mean the group will automatically vote with the board’s recommendation on every matter. For a change-of-control transaction, the obligation to follow the board’s recommendation applies only if specified conditions are met. These include that the acquiring party be independent of MGM, its controlled affiliates, directors and executive officers. The transaction must also provide equal consideration and terms for securities of the same class, unless the covered parties agree otherwise. If any condition is not met, the agreement imposes no restrictions on how they vote on the transaction.

The ownership cap limits People, Diller and their affiliates from building a larger stake through purchases, but provides an exception if their ownership exceeds 29.9% as a result of share repurchases, redemptions or other acquisitions carried out by MGM itself. Exceeding the threshold in this case does not constitute a breach of the agreement, provided the covered parties make no additional purchases while their stake remains above the limit. In return, for as long as the group complies with the agreement, MGM has undertaken not to impose a shareholder rights plan or other defensive measure primarily intended to harm the group, or considered disproportionately more harmful to it than to shareholders of the same class. The agreement also acknowledges that the group’s ownership of securities carrying a majority of voting power does not, by itself, constitute a change of control, unless the board specifically approves that characterization under the agreement. These provisions tie restrictions on the group’s purchases and the company’s commitments to continued compliance.

The amendment follows People’s September 23 announcement that it was withdrawing its offer to buy all publicly traded shares in MGM. At the time of the withdrawal, Diller said People still owned 66.8 million shares, representing about 27% of the company. The company added that it had decided not to pursue taking MGM private at that time, while remaining open to a potential strategic transaction with it. MGM had said the agreement amendment followed the withdrawal of the earlier proposal, while its filing clarified that the new agreement does not require either party to continue an acquisition process. The amendment thus sets rules for potential future votes or changes without announcing a new deal or restructuring.

When People announced its offer in June, it included a 24.1% premium to MGM’s volume-weighted average share price over the 30 trading sessions ended May 29, and a 10.6% premium to the latest closing price at the time. After the withdrawal was announced, MGM shares closed down 2.7% at $37.85 on September 23, then extended their decline to about 11% in subsequent trading, while People shares rose about 4% in that trading, according to Reuters. The next day, MGM shares fell 10% to $33.90, their lowest level in seven months, Reuters reported. These moves put the withdrawn offer in the context of investor interest in the terms of a potential takeover, while the current amendment does not present an alternative offer. The filing did not report a market reaction to the amendment’s announcement on October 27.

MGM Chairman Paul Salem said the agreement gives the board a path to maximize value through share repurchases and a change-of-control transaction “if appropriate,” subject to the board’s fiduciary duties. This priority comes as the company reported consolidated revenue of $4.5 billion in the second quarter of 2026, up 1% year over year, while adjusted earnings before interest, taxes, depreciation and amortization were $610 million, compared with $648 million in the year-earlier quarter. MGM described revenue as record-setting, and Chief Executive Bill Hornbuckle said MGM Digital revenue grew 20% year over year during the quarter. The company also said the MGM Osaka project remains on track to open in 2030. But the voting amendment filing announced no new step concerning these projects or a deal with People, and confirmed that no transaction is currently under consideration.