MGM hits back at investment fund, appoints independent advisor

MGM Resorts has hit back at an investment fund that is pushing for board and structural changes at the casino operator and said it has appointed Evercore Group as an independent advisor to help explore strategic alternatives.

Investment firm Land and Buildings, lead by Jonathan Litt, says MGM is making the same mistakes in capital allocation that almost lead to its bankruptcy seven years ago. He wants the operator to split into a management company and an real estate investment trust to improve tax efficiency. The firm has also proposed four nominees to MGM’s board.

In a filing with the U.S. Securities and Exchange Commission, MGM said its board has the right balance of independence, experience and necessary skills to oversee the company’s strategy.

“The proposed board changes reflect a lack of understanding of the importance of diversity that has strengthened the company and added value for shareholders,” it said.

“Land & Buildings’ nominees are tied to a proposal that has a narrow short-term focus and makes numerous financial, structural and tax assumptions that appear unsupported or are factually incorrect, which calls into question their credibility,” it said.

However, the company also said the possibility of conversion to a REIT will be studied.

Shareholders will vote on the board nominees on April 28th.

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