Diller, MGM Reach Voting Agreement, IAC Influence Capped, But Guaranteed Two Board Seats
Posted on: April 8, 2026, 11:09h.
Last updated on: April 8, 2026, 11:09h.
- Barry Diller’s IAC and MGM Resorts reached a voting agreement under which the media company’s influence will be limited in certain circumstances
- In exchange, IAC is guaranteed two board seats
- IAC owns approximately 23% of MGM shares
Barry Diller’s IAC/InterActiveCorp (NASDAQ: IAC) and MGM Resorts International (NYSE: MGM) reached a voting agreement under which the media company’s influence, in certain circumstances, will be limited at the casino operator.
In simple terms, IAC, which is the largest MGM shareholder, agreed to vote its MGM shares in proportion to how other MGM investors are voting, according to a Form 8-K filing with the Securities and Exchange Commission (SEC).
Pursuant to the Voting Agreement, at any time a matter is brought to a vote at an annual or special meeting of the Company’s stockholders (or in connection with any action proposed to be taken by stockholders in lieu of a meeting), IAC, Mr. Diller and their respective controlled affiliates (collectively the ‘Covered Entities’) will vote any voting securities that they beneficially own that collectively constitute in excess of 25.73% of the total voting power of the outstanding voting securities of the Company (the ‘Excess Voting Securities’) on each matter in the same proportion as the stockholders of the Company (other than the Covered Entities) vote their voting securities on such matters (disregarding stockholders that do not vote),” as noted in the regulatory document.
That implies Diller and IAC could eventually control more than 25.73% of MGM’s voting stock.
IAC’s MGM Stake Has Grown
IAC initially took a 12% stake in MGM, then valued at $1 billion, in August 2020, but that percentage has nearly doubled due to Diller’s company adding to the position and MGM dramatically shrinking its shares outstanding count by way of share buybacks.
In two late March transactions, IAC bought a combined one million shares of the Bellagio operator, lifting its stake in the casino giant to around 23%. That move by IAC wasn’t surprising because in the past, Diller noted IAC would evaluate additions to its MGM holdings.
It’s possible though not confirmed that the voting agreement was struck as a preventative measure to ward off potential activist moves by Diller and IAC. In the time IAC has been an MGM investor, Diller hasn’t publicly signaled activist intentions, though there’s unconfirmed speculation that behind the scenes, he’s voiced frustration over the gaming stock’s performance.
How the IAC/MGM Agreement Could Terminate
There are avenues through which the voting agreement can be terminated. The accord could be scrapped if IAC and its affiliated cease to own 17.5% or more of MGM shares or if the gaming company’s board fails to nominate two IAC-selected directors.
As part of the agreement, the gaming company is guaranteeing IAC two board seats, which it currently controls as Diller and former IAC CEO Joey Levin are members of MGM’s board of directors.
Diller and his affiliates exclusive of IAC and its “controlled affiliates” won’t “be subject to the voting restriction with respect to any Excess Voting Securities, and the Diller Entities will no longer be considered Covered Entities, when both of the following conditions are satisfied: (i) Mr. Diller no longer serves as either the Chairman of the Board of Directors of IAC or as Senior Executive of IAC; and (ii) the Diller Entities no longer beneficially own voting securities of IAC representing at least one-third of the total voting power of the outstanding voting securities of IAC,” according to the SEC filing.
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