Land and Buildings Issues Statement Regarding MGM Resorts
May 19 2015 - 4:30PM
Business Wire
Land and Buildings Investment Management, LLC ("Land &
Buildings") today issued the following statement regarding MGM
Resorts International (NYSE:MGM) (“MGM” or the "Company”):
Dear Fellow MGM Shareholders:
Since our initial engagement with MGM in January 2015, the
Company and its insider shareholders have finally taken a series of
steps that, in our view, can help address the Company’s persistent
undervaluation and underperformance. We strongly believe that these
actions would not have taken place (at least in any timely manner)
without the public involvement of a concerned shareholder such as
Land and Buildings. These steps include, but are not limited
to:
- The hiring of financial advisors to
assist the Company in evaluating the separation of its real estate
holdings from MGM's operating business through the formation of a
REIT;
- The encouraging public statements by
Kirk Kerkorian's Tracinda organization (which has two
representatives on the MGM board of directors (the "Board") and an
18% ownership interest in MGM) regarding its support of evaluating
“all avenues” to deliver value at MGM, including a potential REIT
conversion, as well as its commitment to the highest standard of
compensation practices;
- The increased focus in the Company's
public statements, such as during its most recent earnings call on
May 4, 2015, on return on invested capital, real estate
monetization through the sale of “any of our assets” and dividend
policy to reduce leverage at the parent Company; and
- The termination of the Company's
"dead-hand proxy put."
One thing we clearly agreed upon with MGM Chairman and CEO Jim
Murren throughout this process was that MGM has been, and continues
to be, substantially undervalued and possesses great potential.
Based on their public statements, the substantive and optical
changes in the Company's approach are apparently sufficient to
satisfy the insider shareholders Tracinda and Infinity World, as
well as other major shareholders such as Paulson – at least for the
moment. This is in spite of the fact that two out of three leading
proxy advisory firms1 have now come out with public recommendations
in favor of voting on our Gold proxy card, and agreed with our
assertion that new voices are needed on the MGM Board to benefit
all shareholders.
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. As such, we no
longer intend to nominate any candidates for election as directors
at the Company's 2015 Annual Meeting.
We greatly appreciate the support we have received from so many
MGM shareholders for our efforts on their behalf. We are grateful
for the willingness of Matthew Hart, Richard Kincaid and Marc
Weisman to serve on behalf of our fellow shareholders, and continue
to believe that they would bring valuable experience and leadership
as members of the MGM Board.
Land and Buildings will continue to monitor MGM’s progress in
unlocking shareholder value and intends to continue to hold the
Board and management team accountable. We believe that going
forward, MGM shareholders will be less tolerant of sub-par
operations, poor capital allocation decisions, and executive
compensation that is not aligned with performance. Our efforts, we
hope, are just the beginning steps towards increasing shareholder
value at MGM.
About Land and Buildings:
Land and Buildings is a registered investment manager
specializing in publicly traded real estate and real estate related
securities. Land and Buildings seeks to deliver attractive risk
adjusted returns by opportunistically investing in securities of
global real estate and real estate related companies, leveraging
its investment professionals' deep experience, research expertise
and industry relationships.
LAND & BUILDINGS CAPITAL GROWTH FUND, L.P., LAND &
BUILDINGS INVESTMENT MANAGEMENT, LLC AND JONATHAN LITT
(COLLECTIVELY, "LAND & BUILDINGS") AND MATTHEW J. HART, RICHARD
KINCAID AND MARC A. WEISMAN (TOGETHER WITH LAND & BUILDINGS,
THE "PARTICIPANTS") FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") ON APRIL 16, 2015 A DEFINITIVE PROXY
STATEMENT AND ACCOMPANYING FORM OF PROXY CARD TO BE USED IN
CONNECTION WITH THE PARTICIPANTS' SOLICITATION OF PROXIES FROM THE
STOCKHOLDERS OF MGM RESORTS INTERNATIONAL (THE "COMPANY") FOR USE
AT THE COMPANY'S 2015 ANNUAL MEETING OF STOCKHOLDERS (THE "PROXY
SOLICITATION"). ALL STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ
THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE
PROXY SOLICITATION BECAUSE THEY CONTAIN IMPORTANT INFORMATION,
INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS. THE
DEFINITIVE PROXY STATEMENT AND AN ACCOMPANYING PROXY CARD HAVE BEEN
FURNISHED TO SOME OR ALL OF THE COMPANY'S STOCKHOLDERS AND ARE,
ALONG WITH OTHER RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE
SEC'S WEBSITE AT HTTP://WWW.SEC.GOV/. IN ADDITION, INNISFREE
M&A INCORPORATED, LAND & BUILDING'S PROXY SOLICITOR, WILL
PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING
PROXY CARD WITHOUT CHARGE UPON REQUEST.
_______________
1 Glass Lewis and Proxy Mosaic.
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version on businesswire.com: http://www.businesswire.com/news/home/20150519007069/en/
Investor:Innisfree M&A IncorporatedScott Winter /
Jonathan Salzberger, 212-750-5833orMedia:Sloane &
CompanyElliot Sloane / Dan Zacchei,
212-486-9500Esloane@sloanepr.com / Dzacchei@sloanepr.com
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