Barry Diller's IAC rolls dice with $1 billion stake in casino giant MGM
New York(CNN Business) IAC recently spun off its stake in Tinder-owner Match. But the company apparently has its sights set on people taking a different kind of gamble: It has bought a nearly $1 billion stake in MGM Resorts.
The stake purchased by IAC (IAC), a conglomerate run by media mogul Barry Diller, amounts to about a 12% interest in the Las Vegas-based global casino and hotel giant.
Shares of MGM Resorts (MGM) surged nearly 15% on the news, while IAC's stock was down about 2%.
IAC has been actively mixing up its portfolio lately. The company completed its sale of Match (MTCH) shares last month after announcing plans to do so in December. IAC also agreed in December to buy Care.com, a company that helps people find caregivers and housekeepers, for $500 million. IAC also owns digital content brand DotDash and video tools firm Vimeo.
But the MGM Resorts investment could be Diller's boldest post-Match move yet. Diller said in a press release that the new IAC has a healthy balance sheet and "its opportunistic zeal intact."
"We are energized and excited to make this investment in MGM," Diller said, adding that IAC is particularly interested in "an area that currently comprises a tiny portion of its revenue -- online gaming."
IAC CEO Joey Levin added that "MGM Resorts presents a unique opportunity for IAC to own a meaningful piece of a preeminent brand in a large category with immense potential," noting IAC plans to be "a minority investor and a long-term strategic partner."
MGM Resorts chairman Paul Salem noted that IAC can help MGM continue to grow its digital gaming and sports betting businesses.
Big casino companies like MGM and rivals Wynn Resorts (WYNN) and Las Vegas Sands (LVS) have struggled this year as the coronavirus outbreak has led to a slowdown in travel to Las Vegas and Asian gaming mecca Macau.
But legal sports betting in the United States has been a boon for the likes of DraftKings, FanDuel owner Flutter Entertainment (PDYPF) and casino company Penn National Gaming (PENN), which has a big stake in Barstool Sports.
MGM -- and Diller -- clearly want a piece of that pie.
