Barry Diller’s IAC Rebrands as People Incorporated, Sharpening Focus on Publishing and MGM

• Reconfiguration of IAC will allow for more emphasis on MGM stake
• Diller calls MGM one of his company’s “core” assets
• He reiterates view that MGM stock is undervalued

Barry Diller is reconfiguring IAC/InterActiveCorp (NASDAQ: IAC) with pending changes resulting in a sharper focus on the company’s 26% stake in MGM Resorts International (NYSE: MGM).

In an April 28 letter to shareholders of the media conglomerate, Diller revealed IAC will change its name – likely in August — to People Inc. and will hone its corporate emphasis on its publishing business and its investment in the casino giant.

The corpus of People Incorporated will include the assets of a mostly virtual media business together with the very hard assets of MGM Resorts—if you like, a perfect hedge in a world that is changing so unpredictively fast,” wrote Diller in the letter.

The media mogul said he will remain in his current roles of chairman and senior executive while overseeing the MGM investment.

Diller Still a Believer in MGM

IAC initially took a 12% stake in MGM, then valued at $1 billion, in August 2020.

Helped by the casino Goliath’s appetite for its own shares as well as a recent, modest boost to its position, Diller’s company has come to control 26% of the Bellagio operator’s shares outstanding, making the soon-to-be People Inc. by far the largest MGM investor.

In the letter to IAC shareholders, Diller praised MGM CEO Bill Hornbuckle and what he called “an outstanding management team” at the casino operator while adding the stock is deeply discounted.

“MGM’s leadership position in Macau remains the envy of the industry, and its mega resort abuilding in Japan is a giant future opportunity.  Its digital businesses are growing profitably, and its stock continues to be wildly undervalued,” opined Diller.

Interesting Timing for Diller MGM Talk

Diller’s missive to his shareholders arrived about three weeks after it was revealed his company and MGM reached an agreement under which People Inc. will vote its shares in proportion to how other investors in the casino operator are voting.

In essence, that accord limits, under specific circumstances, the sway Diller’s firm has at the gaming company. That may not be problematic for the media baron because he’s yet to take an overtly activist stance on the MGM stake and he views it as a long-term investment.

Diller and former IAC CEO Joey Levin occupy seats on MGM’s board of directors, but for now, it remains to be seen how the enhanced focus on the gaming company evolves.