IAC Inc. and MGM Resorts International Enter into New Voting Agreement: Critical Updates for Shareholders

Date of Agreement: April 3, 2026
Parties Involved: MGM Resorts International, IAC Inc., and Barry Diller

Key Highlights of the Agreement

• IAC Ownership: As of the agreement date, IAC Inc. beneficially owns 66,822,350 shares of MGM Resorts International’s common stock. This represents a significant stake and underscores IAC’s influence over MGM Resorts International.
• Voting Cap Threshold: The agreement enforces a “Voting Cap Threshold” – IAC and its affiliates (including Barry Diller) can only exercise voting rights up to 25.73% of the total outstanding voting power of MGM Resorts International for any matter. Any shares held above this threshold (“Excess Voting Securities”) must be voted in the same proportion as all other MGM shareholders (excluding IAC and affiliates) who vote on that matter.
• Pro-rata Voting of Excess Shares: Excess shares are to be voted on a pro-rata basis between IAC Entities and Diller Entities based on their respective holdings.
• Director Nomination Rights: IAC has the right to designate two directors to MGM’s Board, provided each meets the company’s Corporate Governance Guidelines. As of the agreement date, Barry Diller is deemed to be one of IAC’s designated directors.
• Termination Triggers: The agreement will automatically terminate, without notice, at the earliest occurrence of any of the following:
  • The collective IAC/Diller Entities’ ownership drops below 17.5% of MGM’s outstanding voting securities.
  • The MGM Board fails to nominate two IAC-designated, qualified directors for election at the annual meeting.
  • A “Change of Control” occurs at MGM Resorts International (defined as a major reorganization, merger, acquisition of a majority voting stake, or sale of all/substantially all assets).
• Director Replacement Obligation: If fewer than two IAC-designated directors are on the Board, MGM must, within one month, add new IAC-designees (subject to regulatory approval) to meet this requirement.
• Special Carve-Out for the Diller Entities: The Diller Entities (Barry Diller and his controlled affiliates) will no longer be subject to the agreement if Barry Diller ceases to serve as IAC Chairman or Senior Executive and the Diller Entities no longer own at least one-third of IAC’s voting power.
• Jurisdiction and Legal Matters: Any disputes arising from this agreement will be resolved in Delaware courts. The agreement is governed by Delaware law, and all parties waive the right to a jury trial.

Potential Price-Sensitive Aspects for Investors

• Limitation on IAC Voting Power: Investors should note that even though IAC holds a substantial number of shares, its voting power is capped at 25.73%. This means that IAC cannot unilaterally control shareholder votes beyond this threshold, which may provide comfort to smaller shareholders concerned about potential overreach by a single large investor.
• Board Influence: The right for IAC to designate two directors (including Barry Diller) gives IAC significant influence over MGM’s corporate governance and strategic direction, which could impact future mergers, acquisitions, or operational changes.
• Automatic Termination and Change of Control: The agreement contains clear triggers for automatic termination, one of which is a change in control scenario. Any such event—like a sale, merger, or major acquisition—would not only end the agreement but likely have a material effect on MGM’s share price.
• Market Implications: The agreement structures IAC’s influence in a way that could make MGM less vulnerable to hostile takeovers by requiring “Excess Voting Securities” to be voted in proportion with other shareholders, potentially supporting share value stability.

Additional Noteworthy Provisions

• Complete Agreement: This document supersedes all prior agreements between the parties regarding the subject matter.
• No Third-Party Rights: Only the parties and their permitted successors/assigns can enforce the agreement.
• Notice Procedures: Formal communication channels are specified for all parties.

Conclusion

This voting agreement between IAC Inc., MGM Resorts International, and Barry Diller is highly relevant for shareholders and potential investors, as it outlines explicit caps on voting power, board influence, and robust termination triggers. The potential for changes in control, as well as the structure of IAC’s influence, are critical factors that could significantly affect MGM’s strategic direction and, consequently, its share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with their financial advisors before making investment decisions. The information provided herein is based on publicly filed documents and may be subject to change or clarification by the involved parties.

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