MGM Resorts stock jumps as Barry Diller's People Inc. makes bid to take over the company

What happened: MGM Resorts International ( MGM ) stock jumped 14% in early trading on Monday.

What’s behind the move: People Inc., the media company run by billionaire Barry Diller, submitted a bid to take over MGM for $18 billion, including debt.

People Inc. already owns a 26.1% stake in MGM, and it submitted a letter to the company to acquire the remaining outstanding shares of the resort and casino company for $48.30 per share in cash, representing a 24% premium to the average price of MGM’s stock over the past 30 days.

What else you need to know: In a letter to MGM’s board of directors, Diller said that his conviction in MGM’s business has strengthened and that People could enhance the company’s value, given its deep familiarity with the business.

"We continue to believe the market materially undervalues the power and durability of MGM's assets,” said Diller, People’s chairman. “We believe MGM's management team is superb, and that there is a compelling opportunity to support MGM's next phase of growth and help unlock its full value."

In late April, Diller rebranded his conglomerate from IAC to People Inc. and consolidated the company’s structure to cut costs and focus on publishing and its stake in MGM. At the time, Diller noted that the company had an “excellent balance sheet with plenty of cash to pursue opportunities.”

In the first quarter, MGM reported improving revenue trends in its Las Vegas Strip resorts and signaled optimism around resilient travel bookings despite a challenging backdrop for consumer sentiment.

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