Recall L&B wants the casino operator to pursure a REIT.
We were gratified to hear today the first credible signal, in our view, that a REIT structure could play a “pivotal role” in monetizing’s MGM’s undervalued real estate and that the Company is willing to sell “any of (our) assets” to reduce leverage and unlock value. However, we believe it is evident that MGM’s management and Board have only acquiesced to truly exploring these potential paths for maximizing shareholder value following the public pressure from our March proposal and proxy contest.
The fact that it has taken this long for management to take these actions, and that they had previously contended as recently as April that our proposal was “seriously flawed,” should be deeply troubling to shareholders. While a REIT is only one element of our campaign, this sequence of events underscores our central argument: that we have serious concerns regarding MGM’s boardroom culture of entrenchment and fresh voices are needed to benefit all shareholders.
Fundamentally, we believe today’s comments are an acknowledgment by MGM that change is warranted at the Company in order to deliver value to shareholders. The only question for shareholders now is whether the Land and Building nominees are more likely to effect the necessary change? We believe that as the Company evaluates how to best unlock value, it is imperative that shareholders have individuals with real estate experience on the Board. They will ensure that the Board is asking the right questions as they consider a pathway to create value and will provide their fellow directors sense of focus that this important value enhancing opportunity deserves.