GGRAsia – MGM Resorts board won’t back hedge fund nominees

MGM Resorts board won’t back hedge fund nominees

Mar 24, 2015 Newsdesk Latest News, Top of the deck, World

The board of directors of MGM Resorts International said it does not endorse any candidates put forth by Land and Buildings Investment Management, the hedge fund that last week suggested the casino operator convert its land holdings into a real estate investment trust (REIT).

The company on Friday “unanimously” recommended shareholders to vote for its own nominees for the board. “Our board of directors strongly urges you not to sign or return any proxy card sent to you by Land and Buildings,” the firm said in a preliminary proxy filing with the U.S. Securities and Exchange Commission.

The date and location for the annual meeting have not been disclosed.

Land and Buildings last week said MGM Resorts should split into a separate REIT and hotel-management company. It also suggested “monetising” Macau-based MGM China Holdings Ltd, which owns and operates the MGM Macau (pictured) and is building the US$3-billion MGM Cotai.

The hedge fund, owner of fewer than 1 percent of MGM Resorts’ outstanding shares, announced its intention to nominate four directors to the board of the U.S.-based casino operator, including its founder and manager Jonathan Litt.

In Friday’s filing, MGM Resorts urged shareholders to vote in favour of the 11 current board members, including company chairman and chief executive Jim Murren.

According to the proxy statement, MGM Resorts executives met with Land and Buildings representatives during several occasions since January.

The company said it decided not to include the Land and Buildings nominees “after careful consideration”. “The board, as it is currently constructed, is very effective, independent, and diverse and has a broad range of expertise (including real estate, finance and operations),” the firm said.

The casino operator said it is still “carefully reviewing” Land and Buildings’ proposals, including the REIT strategy.

In a press release, Land and Buildings said it was disappointed by MGM Resorts’ decision.

“We believe [it] sends a clear signal that the [MGM Resorts] board would prefer to take part in a contentious situation rather than work collaboratively to reach a solution that is in the best interests of all shareholders,” said the hedge fund.

“We have no choice other than to file our own proxy statement in the near future,” it added.