22 April 2011

MGM Resorts Founder Kirk Kerkorian to Step Down From Board

Billionaire Kirk Kerkorian will step down in June from the board of MGM Resorts International (MGM), the casino company he founded, to become a senior adviser and its first director emeritus. 

Kerkorian, 93, MGM Resorts’ biggest shareholder through his Tracinda Corp., said in an interview that his 27 percent stake is ably represented by the board, including Tracinda executives Dan Taylor and Anthony Mandekic, and by Jim Murren, chairman and chief executive officer of the Las Vegas-based resort operator.

“I’m the founder of it. I just didn’t care to keep going back to meetings,” Kerkorian said in an interview at his office in Beverly Hills, California. The board meetings “got to be very lengthy.”

Kerkorian, a soft-spoken and slightly built former boxer and pilot, said although his hearing and eyesight have deteriorated, he exercises daily “to stay healthy.” An incessant dealmaker, over the decades he’s traded major stakes in casinos, airlines, automobile companies and film studios. He continues to work in the office daily.

“I do stay busy,” he said. “I like new challenges.” Kerkorian built MGM Resorts into the biggest casino operator on the Las Vegas Strip through acquisitions and new construction. The company said yesterday it will gain 51 percent control over its joint venture in Macau, the world’s biggest casino market, in a deal that includes an initial public offering in Hong Kong of some shares held by partner Pansy Ho.

Kerkorian said he prefers a more strategic, advisory role, adding he will continue his conversations with Murren, 49, “at least three to four times a week.”
No Board Vote

“I think the world of management, and they’re coming out with some real good news,” Kerkorian said, referring to the Macau deal and others he didn’t specify. Murren “is doing a great job. He’s young, enthusiastic and has a lot of energy.”

After his term expires in June, Kerkorian will retain a “standing invitation” to attend board and executive committee meetings, MGM Resorts said in a statement. He won’t hold a vote on the board.

“We’ve gone into and through and out of the recession, and he’s immensely proud of how we’ve navigated through that and he feels like this is the right time,” Murren said in an interview. “He’s never backed down from any fight, and the right time would not have been in 2008 or 2009 or even 2010.”

Kerkorian arrived in Las Vegas in the 1940s. His first venture in the gaming business was a stake in the Dunes Hotel in 1955, according to the company. Since 2000, he has expanded MGM by acquiring Mirage Resorts and Mandalay Resort Group.
Periodic Inquiries

Tracinda said in January it receives periodic inquiries about its stake in the casino company and may explore potential transactions.

“We love the MGM investment,” Tracinda’s Taylor said in an interview. “Jim and his team are doing a fantastic job, and we think there’s lots of opportunities still to come in this investment.”

MGM Resorts rose 24 cents, or 1.8 percent, to $13.94 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have declined 6.1 percent this year.

MGM Resorts owns 10 properties on the Strip including the CityCenter venture with Dubai World. The company also owns casinos elsewhere in Nevada and in Mississippi and Michigan, joint ventures in New Jersey and Illinois, and has a hospitality management and development unit.