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The Powerpoint Equivalent of Jim Murren's Head On A Plate

By Chuckmonster on Thursday, 30th April 2015 10:18am
  » filed under MGM Mirage  comments: 12


Activist financial firm Land And Buildings have taken their fight to seize control of MGM Resorts International's board of directors to the people in the form of an explosive 99 page document you can download here. Consider it the Thursday menu for Jim's Plate.

The nuts and bolts are that Land And Buildings thinks MGM is underperforming, undervalued and poorly managed. It is their belief that shareholder value can be unlocked by selling non-core assets, paying down debt and dividing MGM into two different companies - an operating company which runs the properties and a real estate investment trust (REIT) to hold its physical assets, land and buildings. They aim to do this by replacing four of MGM's Board of Directors members with nominees they've selected via a public proxy fight much like what just happened at Wynn Resorts.

Land and Buildings states that "This election is not about replacing the Company's CEO". Based on the following slides, they make a convincing argument otherwise.

After kicking him in the nuts for a half-dozen slides, they played the Murrening card.

The whole document is chock full of incredible stats, figures and collection of head-scratching statements taken directly from the mouths of MGM and Murren.

Ipso Facto Jimbo!

Big thanks to VT reader DuLac55 for the tip.

Tagged: jimbo   murren   mgm   land and buildings   yowza   


Comments & Discussion:

I see they conveniently left all traces of Caesars Entertainment off as one of MGM's "Peers". Saying they have a different structure and are "challenging to evaluate" is the equivalent of saying "MGM makes less money among those in their industry that make more money." And no mention of Station Casinos but they bring up Boyd, Pinnacle, and Penn? I'm not saying they don't have a point about assets and an REIT and they may end up succeeding in their objective, but c'mon.

I noticed this the omission too. Caesars is bankrupt, think this takes you off the table as a comparison item. Also ~10% of Caesars it is floated on the market... not exactly an apples to apples comparison. But I agree with you... L&B is using the information they have to make their arguments.

Do you think Jimbo got his pose from Devo's Duty Now for the Future?


Because if he did, I would have to show him at least a little love.

City Center is what brought MGM to it's knees but I think now it might just save MGM, especially if they sell off the Crystals shopping center for a pretty penny as the US economy improves.Originally I thought City Center was going to be a disaster when it opened and I had my first stay there at Aria based on it's cold, sterile environment and the lack of direct access into the Aria casino from the Strip. However, over the last few years I have warmed up to City Center as a good move on MGM's part to lure more business-oriented customers, specifically conventions and their expense-account conventioneers. I also personally like the Aria rooms and casino now as a frequent customer. I think Murren might just have the last laugh for betting BIG on Vegas assuming the US economy doesn't fade like Macau's. From what I've heard just in the last few days, Adelson & Wynn aren't looking too good for betting all their chips on the Chinese propensity to gamble over there.

Joe, could be devo, could be kraftwerk's "the man machine" but the facts are much more obvious.... he thinks he's Superman.

I've enjoyed watching this unfold. I own some $MGM so I see the shareholder communication, which has become entertaining in the past month or two. I thought Jimbo was crazy for going all in on City Center for long time. The last year or so, he's starting to look smarter on that deal. We will see. Anyway, here is the letter they sent to shareholders two days before the Land And Buildings conference call and pony show: https://eresearch.fidelity.com/eresearch/evaluate/news/basicNewsStory.jhtml?symbols=MGM&pageno=&storyid=201504280830PR_NEWS_USPR_____LA92006&provider=PR_NEWS_&product=USPR____&sb=1&sc=1&san=1

Tracinda (Kirk Kekorian's company) has issued a press release supporting MGM on this matter.


I'd guess Caesars and Stations aren't on there since they're not public, unlike all of the other companies listed. It looks like they're comparing stock price growth, which would explain why Caesars and Stations are missing and Hilton's N/A in the 3 and 5 yr comparisons.

Caesars is technically a publicly traded company even though only a small percentage of the company's stock is on the open market, but considering they're in bankruptcy, including them in the presentation would actually hurt their argument.

I see that they are trying to make their case, but it's a weak case because it leaves out the part of the industry that isn't doing as well and only focuses on the part doing better. A totally one sided analysis is not a good analysis. Comparing Apples to Apples is fine, but you can't say it's the best (or worst) fruit if you've never tasted a Banana.

Does Kirk Kerkorian still have final say on who runs MGM Resorts?

I would rather Jim Murren remain in charge of MGM than hand the keys over to these guys. Wall Street ruined Caesars; they will ruin MGM resorts too if they're allowed. But please Mr. Murren, please bring kitschy themes back into your casinos. Las Vegas is supposed to be fun. The de-themed casinos feel sterile, like a hospital, a place where people go to die.

Tracinda is still the single largest shareholder and has two seats on the board and has already pledged their support to the company on this matter. Interestingly enough, the largest institutional shareholder is T. Rowe Price, who also happens to be the largest institutional shareholder at Wynn Resorts.

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