INTERNATIONAL - MGM Resorts International has struck a deal with hedge fund Corvex Management’s founder, Keith Meister, to give him a board seat, one week after a rival activist investor was seen building a position in the casino operator.
Corvex owns roughly 3 percent of MGM’s stock. Meister will join the board on Friday, expanding its size by one to 13 members, MGM said in a statement released late on Thursday.
MGM’s chief executive officer and chairman, Jim Murren, said the company and Meister have been holding “constructive dialogue” over the last several months, and he praised the investor’s track record of “helping companies maximize value for shareholders as well as his experience in real estate and gaming.”
Speculation had mounted in recent days about a possible change to the board after Reuters reported that Starboard Value, led by Jeffrey Smith, had built a position in MGM and was considering pushing for changes.
In early January, MGM Resorts announced plans to cut costs and boost growth, proposing to increase annualized adjusted earnings before interest, taxes, depreciation and amortization by $300 million by the end of 2021.
“It is clear to me that MGM is focused on driving profitable growth,” Meister said in a statement, adding that he thinks he can help. Meister, who founded Corvex in 2010 after working for financier Carl Icahn, has sat on the boards of Yum Brands Inc and the Williams Companies, among others.
Since 2017 MGM said it has appointed four new independent directors, including Meister.
The gambling industry has faced a shakeup in recent years as many states that used to prohibit gaming are now permitting it.
Last year MGM’s smaller peer Caesars Entertainment Corp rejected a merger approach from Tilman Fertitta, the billionaire owner of Golden Nugget Casinos. Since then speculation has mounted about Caesar’s future, especially since it was announced that Mark Frissora will be leaving as chief executive next month.Reuters