Merger talks between MGM and People Inc. have ended

Merger talks between MGM Resorts International and People Inc. have fully ended. MGM's CEO Bill Hornbuckle confirmed this on the company's third-quarter earnings call. He also referred to a newly signed voting agreement between the two companies. Under the agreement, People's stake in MGM is capped at 29.9 percent.

People abandoned its $18 billion takeover bid for the Excalibur operator last month due to complications in the deal. After the bid collapsed, speculation emerged that MGM could acquire People and take control of the MGM shares held by Barry Diller. This move was said to amount in practice to a large share buyback. Hornbuckle, however, ruled out this possibility.

In answering an analyst's question, Hornbuckle said the core of the dispute was unlocking the value of roughly 25 percent of MGM's shares. He stressed, however, that the matter is now over and the focus is returning to the company's operations. People currently holds more than 26 percent of MGM, making it the company's largest shareholder.

Texas Capital analyst David Bain said the end of the talks removed an uncertainty burden for MGM. According to Bain, the possibility of a two-step transaction, structural complexity and uncertain timing may have created a lasting valuation discount in the shares. In Bain's view, the voting agreement capped at 29.9 percent also removes this distraction. Diller, for his part, had said he was interested in a possible strategic transaction with MGM in the future, but how that might take shape is unclear.