Research Reports

Summary

IAC Inc. and Barry Diller entered into a Voting Agreement with MGM Resorts International on April 3, 2026, requiring them to vote their excess MGM voting securities (above 25.73%) in proportion to other MGM stockholders, subject to termination triggers tied to ownership, board nomination, and change of control.

Key takeaways

IAC and Barry Diller collectively beneficially own 66,822,350 shares of MGM common stock as of April 3, 2026 — representing over 25.73% of MGM’s total voting power — triggering the Voting Agreement’s proportional voting requirement.

The Covered Entities must vote Excess Voting Securities in the same proportion as non-Covered MGM stockholders, which limits IAC’s and Diller’s ability to unilaterally influence MGM shareholder votes.

The Agreement terminates automatically if Covered Entities’ collective beneficial ownership falls below 17.5% of MGM’s outstanding voting securities, introducing a material ownership threshold condition.

MGM’s Board must nominate two IAC-designated Qualified Directors at each annual meeting; failure to do so triggers termination — and Mr. Diller is deemed designated as of the Agreement date.

Diller Entities cease being Covered Entities only when both conditions are met: Mr. Diller no longer serves as IAC Chairman or Senior Executive, and Diller Entities own less than one-third of IAC’s total voting power.

Full analysis

This Voting Agreement represents a significant governance arrangement that materially constrains IAC’s and Barry Diller’s influence over MGM Resorts International despite their substantial ownership stake. With 66.8 million shares held — constituting over 25.73% of MGM’s voting power — IAC and Diller possess de facto blocking power on many shareholder matters; the Agreement neutralizes that advantage by mandating proportional voting for all shares above the cap, effectively aligning their voting behavior with the broader MGM shareholder base. The termination provisions introduce structural dependencies: continued influence is contingent not only on maintaining ≥17.5% ownership but also on MGM’s board cooperation in nominating IAC-designated directors — a condition already satisfied as of the agreement date with Mr. Diller deemed designated. Critically, the Agreement embeds a dual-path exit mechanism for the Diller Entities, linking their ongoing obligations to both Mr. Diller’s active leadership role at IAC and their continued influence within IAC itself — suggesting the arrangement is designed to persist only while Diller remains operationally central to IAC’s corporate strategy. For investors, this signals a stabilized, rules-based governance framework for MGM’s largest shareholder bloc, reducing near-term uncertainty around activist or unilateral control initiatives, but also embedding long-term contingencies tied to leadership succession and cross-company ownership dynamics.