MGM Resorts shares rise after $1-billion investment from Barry Diller’s IAC – The Globe and Mail

Barry Diller’s IAC/InterActive Corp said on Monday it has bought a 12 per cent stake in MGM Resorts International for about $1 billion (£764 million), sending the casino operator’s shares soaring 14 per cent.

The investment comes at a time when the gambling industry has been ravaged by government restrictions on movement due to the COVID-19 pandemic, as well as fears about public gatherings.

MGM reported a 91 per cent fall in revenue in the latest reported quarter and has slashed its dividend to weather the impact of the health crisis on its financials. Shares of the company have sunk more than 35 per cent this year.

MGM’s online gaming business, which currently constitutes a tiny portion of its revenue, was what initially attracted Diller, the billionaire told shareholders in a letter.

“MGM presented a “once in a decade” opportunity for IAC to own a meaningful piece of a preeminent brand in a large category with great potential to move online.”

Diller added he has followed the online gaming space for a while, looking for an opportunity to enter the $450 billion global industry.

IAC has a history of building businesses and later splitting them into separate companies – travel site Expedia Group Inc and ticket booking site Ticketmaster are some examples.

Shares of IAC, which recently completed separation of Match Group into a separate company, fell about 1 per cent after the news.

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