Episode summary
Barry Diller Offers to Buy Rest of MGM in Deal Valued at Nearly $19 Billion | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Jody Lurie, Matthew Palazola, Mandeep Singh
Summary
Barry Diller’s People Inc. is offering to buy the rest of MGM Resorts International it does not already own at $48.30 a share in cash, a deal the guest framed as an LBO-style transaction that would load more debt onto MGM. The guest said People already owns 26.1% and wants to reach 50.1%, with roughly $8 billion in additional debt tied to the transaction and leverage rising from the mid-5x area to the mid-7x range on a lease-adjusted basis. She argued MGM’s sale-leaseback structure leaves bondholders uncomfortable even before the deal, and expects the bonds to widen further.
On Berkshire Hathaway, the guest said the proposed $6.8 billion all-cash purchase of Taylor Morrison Home Corp. fits Greg Abel’s preference for “doubles and singles.” She described Taylor as complementary to Berkshire’s Clayton Homes business because it is a site-built homebuilder, and noted the deal would use only about 2% of Berkshire’s $373 billion in cash as of March 31. She also said Berkshire may increasingly look for operational integration, even though it usually avoids talking about synergies.
The show also covered Nvidia’s move into PCs with RTX Spark Superchip and the broader strategy behind it: building an ecosystem for agentic AI, robotics, and humanoids, not just chasing the saturated PC market. Later, Bloomberg’s Isabelle Lee said SpaceX’s planned IPO is already forcing index providers to change rules, including shorter seasoning periods, and could require about $20 billion of index-fund buying.
Key takeaways
- The guest said People Inc.’s MGM bid is more like an LBO than a normal acquisition because it would push leverage into the mid-7x range.
- She said MGM’s sale-leaseback-heavy structure already makes bondholders uneasy, and the new bid is likely to widen the bonds further.
- The guest said Berkshire’s Taylor Morrison deal is a small, complementary bet that fits Greg Abel’s “doubles and singles” approach.
- She said Nvidia’s PC push is mainly about creating an ecosystem for agentic AI and robotics, not taking meaningful share from Intel or AMD.
- Isabelle Lee said SpaceX’s IPO is forcing index providers to rethink seasoning rules, with Nasdaq cutting the wait to 15 days.
- She said analysts estimate index funds may need to buy about $20 billion of SpaceX shares if the new rules apply.
Notable quotes
“I think this is probably able building investor confidence over time”
“they build the house and then they bring you the house”
“PC is a saturated market. You know, when you think about the PC market, 250 million units a year”
How the episode opens
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Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, it is Monday, which means uh M&A is in the house right now. And uh one of the big ones that we're keeping an eye on here is People offering to buy MGM Resorts for $48.30 a share in cash.
And for anyone who's wondering, People Incorporated is a company controlled by Barry Diller. So, let's bring in Jod Lori. She's our senior credit analyst for more on this.
Jody, walk us through what this looks like because this is $48.30 a share in cash. Uh is there going to be debt involved?
Oh, there is going to be debt involved, Scarlet. I will not, you know, doubt that. any measure.
Now, of course, is the deal going to get done? That's the bigger question. But right now, so People owns 26.1% and they're planning on increasing that by 24% in terms of total ownership or 24 percentage points um in total ownership.
And so they want to own 50.1% and have other investors own the other amount. Now, if you look at the whole package of that 744% that's getting acquired, we estimate that's about 8 billion in debt if you exclude the amount of cash that people has on hand, which is a little over a billion. It's at 1.1 billion.
So, $8 billion is quite a lot. Now, if you only look at what they're going to buy, it's still, you know, it's still a large amount. It's still $45 billion in terms of leveraging up the company.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- diller mgm deal
- berkshire taylor morrison acquisition
- nvidia pc chip intel competition
- ai era computing modernization
- spacex ipo market structure
Companies and tickers mentioned
- MGM
- BRK-B
- BRK-A
- NVDA
- INTC
- MGM Resorts International
- People Inc
- Berkshire Hathaway Inc.
- Taylor Morrison Home Corp.
- Nvidia
- Intel Corp.
- SpaceX
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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