Barry Diller group invests $1B in MGM, citing online gaming

Iac/interactivecorp, led by media executive Barry Diller, on Monday invested around $1 billion in MGM Resorts International stock, shoring up the company’s online gaming and sports wagering and sending the stock soaring.

The investment represents about a 12 percent stake in the company.

In a letter to shareholders Monday, the company outlined its interest in MGM: online gaming.

“We believe 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,” the letter, filed with the U.S. Securities and Exchange Commission, said.

The company said it had been looking to enter the online gaming space “for a while” and MGM’S online gaming offerings are poised to develop and thrive.

“MGM also is an aspirational brand, which could be delivered with daily accessibility and offer gaming

consumers (including the 34 million M-life Rewards members) a wider range of services, both physical and digital, than any competitor,” the letter said.

MGM shares, traded on the New York Stock Exchange, closed up $2.62, 13.8 percent, on volume more than 2½ times the daily average. After hours, shares retreated 20 cents, 0.9 percent, to end at $21.45 a share. In early trading, shares peaked at $23.76 a share.

“We could not be more excited to welcome IAC and Mr. Diller as an investor in MGM Resorts,” said Paul Salem, MGM’S chairman of the board of directors. “Mr. Diller and Joey Levin, CEO of IAC, bring vast experience in both entertainment and online commerce and we will take full advantage of their experience.”

Salem indicated an IAC representative would be invited to join MGM’S board of directors.

“IAC’S expertise in growing and expanding brands online is a natural fit for our focus on enhancing the resort experience through curated and personalized offerings, as well as digital enhancements in sports betting and online gaming,” said MGM President and CEO Bill Hornbuckle.

In early July, IAC announced that it had separated from Match Group, which offered a portfolio of online dating services that included Tinder, Match and Okcupid, giving IAC the opportunity to invest billions of dollars.

Diller, who has a reported net worth of $4.2 billion, founded the Fox Broadcasting Co. and USA Broadcasting.