Activist investor Starboard Value LP is building a stake in MGM Resorts International as the Las Vegas-based hotelier faces investor scrutiny over its MGM 2020 growth strategy, Reuters reported Jan. 10, citing two people familiar with the matter.
Starboard's plans for the stake are still unclear, but MGM Resorts is aware of the investment, the source reportedly said.
The report comes a week after the casino operator unveiled a new growth initiative that is expected to deliver a total annualized EBITDA increase of $300 million, $200 million of which will be achieved in 2020.
In September 2018, the New York Post reported that Starboard took a stake of over $500 million in MGM Resorts.
The investor, along with other hedge funds, reportedly planned to push the company to sell its Macau property and merge its real estate investment arm, MGM Growth Properties LLC, with Caesars Entertainment Corp.'s real estate investment trust, VICI Properties Inc.
In a recent statement to Reuters, MGM Resorts, which has a portfolio of 28 hotels globally, said the company "does not comment on market rumors," while Starboard did not respond to a request for comment.