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Best of Howard Stutz

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Howard Stutz
 

Shareholder ends proxy fight with MGM Resorts

20 May 2015

New York based Land and Buildings Investment Management ended its proxy fight with MGM Resorts International Tuesday, saying that “substantial insider shareholders” were resistant to changing the company’s board.

However, the real estate group, which owns less than 1 percent of MGM Resorts’ stock, took credit for steps the company recently took to address “persistent undervaluation and underperformance.”

Land and Buildings wanted to convert a portion of the casino operator into a real estate investment trust and replace four of the company’s board members with its own slate of candidates.

In a statement, the investors said MGM Resorts’ board had support from its biggest shareholders, including CityCenter partner Dubai World and hedge fund owner John Paulson.

MGM’s largest individual shareholder, Los Angeles-based Tracinda Corp., said May 1 that it would vote its 19 percent stake in favor of the current company’s board. Tracinda is the investment arm of billionaire Kirk Kerkorian, MGM’s founder.

“While we obviously believe that change at the board level would add needed fresh voices to assist in unlocking shareholder value, we recognize that these substantial insider shareholders are resistant to explicit board change at this time,” Land and Buildings founder Jonathan Litt said in a statement.

The company’s annual shareholders meeting is May 28 at Bellagio.

Independent proxy advisory firm Institutional Shareholder Services dismissed Land and Buildings’ bid and suggested stockholders support the company. A second advisory firm, Glass, Lewis & Co., issued a positive report on MGM Resorts, but said shareholders should vote for just one of Land and Buildings’ board candidates.

In a statement, MGM Resorts Chairman and CEO Jim Murren said he appreciated the “support and feedback” received from shareholders.

“Our board and management have always been receptive to constructive shareholder views and are committed to continuing to thoroughly evaluate all strategic initiatives that will deliver sustainable value,” Murren said.
Shareholder ends proxy fight with MGM Resorts is republished from Online.CasinoCity.com.