Concerned about a “muted stock performance” and other business matter, MGM Resorts International investor Land and Buildings Management on September 25 issued a letter to fellow investors in MGM Resorts International. The letter follows an attempt to conduct a hostile takeover of MGM Resorts earlier this year, which ended in a whimper, since L&B only owns 1 percent of MGM stock.
The letter began, “After we initiated our engagement with Jim Murren, the chairman and CEO of MGM, in January of 2015 he stated that ‘there were no sacred cows’ and ‘all options were on the table’ to position MGM to generate substantial long-term returns for all shareholders. Given the muted stock price performance since then it is clear to us investors do not believe Mr. Murren’s rhetoric and continue to question why the company has not taken the steps necessary to address the material undervaluation of MGM’s shares.”
The letter went on to strongly suggest that MGM sell its share of CityCenter. “The CityCenter project cost a remarkable $9 billion (more than 80 percent of the company’s current market cap) and has been written-down by more than 50 percent of its cost… By selling CityCenter, not only would MGM finally address its long-standing leverage issue, it would also restore shareholders’ faith that Mr. Murren and the board are indeed prioritizing shareholder value.”
There was no reaction from MGM by press time.
