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MGM committed to Macau, shareholder drops board bid


MGM Resorts is fully committed to its investment in Macau and would be more inclined to increase its holdings here than divest them, William Scott, president of MGM Asia, Pacific said.

Scott was speaking at the G2E Asia conference a day after activist investor Land and Buildings dropped its bid to appoint its own candidates to the operator’s board.

In a press release, Land and Buildings noted that it had failed to garner the support of other major shareholders, such as Tracinda and Infinity World.

The investment firm argues MGM is undervalued and was pushing for a breakup of the company and its transformation into a real estate investment trust, which is seen as more tax efficient.

“Would we consider a REIT? Yes because we give careful consideration to all ideas, but some ideas are just bad ideas,” Scott said. “Would we consider selling down our interest in Macau? I think the opposite would be true,” he said after giving the keynote address at the conference.

Land and Buildings said since it began its campaign in January, MGM has taken steps to improve shareholder value and has shown an increased focus in public statements on issues such as a return on invested capital, real estate monetization through the sale of “any of our assets” and a dividend policy to reduce leverage at the parent company.

“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,” it said. “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.”

In Macau, Scott said the group’s new property on Cotai was close to topping off and was on schedule to open late next year.

The property is built on an 18-acre plot and is designed to reflect a series of stacked jewel boxes.

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