Digital and media powerhouse Inter Active Corporation, better known simply as IAC, has bought 12% of MGM for $1 billion, stating that the investment is a rare opportunity for the American company.
Betting on Stocks
IAC has a budding reputation for acquiring, developing and growing businesses, including ANGI Home services Inc, Expedia and recently paid the $1 billion for the dating platform Match.com.
Barry Diller, who works as the chairs and senior executive for IAC, has described the new investment into MGM as energizing and exciting. Diller is probably not wrong considering the current success of the gaming world. You just have to look towards GVC Holdings and the achievements of their gaming portfolio, especially through their top performing casino brand, PartyCasino, to see how profitable the industry can be.
Although MGM is more than just gaming, Diller has gone on record to say that this part of the investment is one of the most exciting. Considering the nature of IAC and its expertise in innovative technology and media, the investment appears to be the perfect fit.
Diller himself has a stellar CV in the media and film industries. He produced several well-known films, namely Indiana Jones, Grease and Beverly Hills. He also occupied top jobs in the industry such as the chief of Paramount Pictures before moving on to be the CEO of 20th Century Fox.
One of the concerns about investing in one of Vegas’s most prominent players is the potential for the industry to come back from the year’s setbacks. Diller did state that he believes the pandemic will be overcome by the land-based operations but has also said he and IAC are motivated by the online gaming space too.
He went on to state that they have wanted to get into the online gambling niche for some times but have hit multiple barriers. One way of overcoming some of those obstacles is to have a presence in the land-based industry first. Thus, this could be the first of many steps that IAC take into the world of (online) gambling.
MGM chair Mr Paul Salem has welcomed the investment and has stated that MGM will welcome IAC to nominate one of their experts to join the operator’s board. Salem is looking forward with equal excitement of tapping into the knowledge and skills of Diller and his co-workers. While MGM CEO, Bill Hornbuckle, believes that the two operations are a “natural fit”.
“We appreciate that they share our long-term strategic vision for growth and maximising value for our shareholders,” Hornbuckle said. “We welcome their collaboration and are excited at the possibilities it will bring.”
The acquisition might not be such a bad bet.