Enterprising Investor
8 년 전
sbe Completes Acquisition Of Morgans Hotel Group (12/01/16)
Expands sbe's portfolio to 22 hotels, and 129 venues to position sbe as the leading global lifestyle hospitality brand
The Yucaipa Companies consents to transaction and together with Cain Hoy Enterprises will hold substantial Preferred and Common Equity stake in sbe
Security Benefit to provide debt financing for recapitalization;
Ron Burkle and Jonathan Goldstein to join Sam Nazarian on sbe Board of Directors
NEW YORK, Dec. 1, 2016 /PRNewswire/ -- sbe Founder and Chief Executive Officer Sam Nazarian today announced with partners Ron Burkle and Cain Hoy Enterprises the definitive closing of sbe's acquisition of Morgans Hotel Group, a move that further expands its international footprint and solidifies its unique position as the preeminent global leader of lifestyle hospitality management, entertainment, food & beverage and development. The transaction, which has a value of $805 million, more than doubles the number of hotels in sbe's portfolio that includes more than 100 properties currently operating or in development.
"sbe is the only global hospitality company that offers a complete 360-degree lifestyle experience, from hotels and residences to restaurants, entertainment and nightlife," says Nazarian. "Guests can stay, play, eat and indulge, all within our portfolio of assets."
The acquisition brings Morgans' iconic Delano and Mondrian brands – along with 13 domestic and international hotel management and franchise/licensing agreements – together with sbe's existing collection of notable hotel brands, which include such imprints as SLS hotels, The Redbury hotels, and Hyde hotels. sbe's award-winning restaurant brands include The Bazaar by José Andrés, Fi'lia by Michael Schwartz, Katsuya, Cleo, Umami Burger and Hyde Lounge. As part of the Morgans acquisition, sbe takes direct ownership of the 194-room Delano Hotel in South Beach, the 878-room Hudson Hotel in New York City and the 372-room Clift Hotel in San Francisco.
Nazarian adds, "The acquisition of Morgans not only further expands our offering – but brings the invaluable partnerships of Ron Burkle and Cain Hoy Enterprises. sbe will now have a presence from San Francisco to Doha; Los Angeles to London - and brings its impressive history, talented team and culture of service and innovation to the sbe family. We couldn't be more pleased about the transaction."
"Our successful two-year relationship with Cain Hoy and their talented leadership team headed by Todd Boehly and Jonathan Goldstein is a testament to Cain Hoy's vision and innovative investment philosophy of helping companies grow through invaluable guidance and capital," says Nazarian. "The shoulder-to-shoulder relationship that the sbe team and I have had with Cain Hoy has allowed sbe the confidence to pursue global and disciplined growth to the benefit of all of our shareholders."
THE FUTURE
sbe's growth will accelerate in coming months, further growing its footprint with the recent openings of The Redbury in New York and SLS Brickell in Miami, and four additional hotels expected to open in 2017, Mondrian Doha, Qatar; as well as SLS Park Avenue New York, SLS Seattle and Hyde Hotel and Residences, South Florida. An additional nine hotels will be opening within the next two years, bringing sbe's portfolio to 35 hotel properties by year-end, 2018.
Upon the acquisition, the expanded company will operate under the name of sbe and feature a portfolio of 22 world-class international lifestyle hotels in global markets such as Los Angeles, New York, Las Vegas, Miami, San Francisco, Istanbul and London, in addition to residential properties within North America. sbe currently offers 129 hotel, entertainment, nightlife and restaurant venues globally.
sbe expects to integrate its brands and successful revenue-driven strategies throughout the Morgans portfolio, including cutting-edge marketing and sponsorship platforms, its innovative customer loyalty and rewards program, THE CODE, which boasts over 2 million members, and residential, service department, restaurant and hotel development and design operations.
Nazarian will retain all day-to-day management responsibilities and half of the common stock interests in sbe with the remaining half of the common stock and $150 million of newly issued preferred equity shared equally between Cain Hoy and Yucaipa. The acquisition necessitated Yucaipa's support, which was provided given the opportunity.
"I like to work with creative, strategic-thinking leaders, and Sam Nazarian is one of the best in the business," says Ron Burkle. "I'm excited to work with Sam and his exceptional team at sbe towards redefining the hospitality landscape."
Both Jonathan Goldstein of Cain Hoy and Ron Burkle will join Nazarian on sbe's Board of Directors.
BEHIND SBE
"My father Younes and my brother David have been a critical part of the development of sbe and I am thrilled to continue our work together and to collaborate on this next phase of the company with Jonathan Goldstein, Cain Hoy Enterprises and Ron Burkle, with Yucaipa's growing portfolio of world-class hospitality assets in Soho House, Sydell Group and Discovery Land Company. Cain Hoy and Yucaipa's investment significantly improves sbe's financial strength and provides us with the opportunity to invest funds to refresh the iconic Morgans-owned properties, Delano and Hudson," says Nazarian. "Equally important, it gives us the flexibility to pursue growth opportunities."
"By adding the Morgans portfolio to sbe's existing stable of brands, I am confident that with Sam and his executive team at the helm, we will leverage this acquisition into strong growth for the company," says Jonathan Goldstein of Cain Hoy.
Dakota Development, the real estate development subsidiary of sbe, will have a prominent role in the development of sbe properties around the world.
The acquisition grows the number of sbe employees to 5,000, and will include the recruiting of additional top executives to lead critical disciplines throughout the organization.
Houlihan Lokey served as financial advisor and O'Melveny & Myers served as legal advisors to sbe on the transaction.
About sbe
Established in 2002 by Founder and CEO Sam Nazarian, sbe is a privately-held, leading lifestyle hospitality company that develops, manages and operates award-winning hotels, residences, restaurants and nightclubs. Through exclusive partnerships with cultural visionaries, sbe is devoted to creating extraordinary experiences throughout its proprietary brands with a commitment to authenticity, sophistication, mastery and innovation. Following the acquisition of Morgans Hotel Group, the pioneer of boutique lifestyle hotels, sbe has an unparalleled global portfolio featuring 22 world-class lifestyle hotel properties in 9 attractive gateway markets and more than 129 global world-renowned hotel, entertainment and food & beverage outlets. The company is uniquely positioned to offer a complete lifestyle experience - from nightlife, food & beverage and entertainment to hotels and residences, and through its innovative customer loyalty and rewards program, The Code, as well as its award-winning international real estate development subsidiary, Dakota Development - all of which solidify sbe as the preeminent leader across hospitality. sbe will continue its expansion with 13 hotel properties opening in the next two years (some with residences), including the SLS New York, SLS Seattle, Mondrian Doha and Mondrian Dubai. The company's established and upcoming hotel brands include SLS Hotel & Residences, Delano, Mondrian, Redbury, Hyde Hotel & Residences, Clift, Hudson, Morgans, Royalton, Sanderson and St Martins Lane. In addition, sbe has the following international acclaimed restaurants and lounges: Katsuya, Cleo, The Bazaar by José Andrés, Fi'lia by Michael Schwartz, Umami Burger, Hyde Lounge and Skybar. More information about sbe can be obtained at sbe.com or by downloading the sbe App.
About The Yucaipa Companies
The Yucaipa Companies is a premier investment firm that has established a record of fostering economic value through the growth and responsible development of companies. As an investor, Yucaipa works with management to strategically reposition businesses and implement operational improvements, resulting in value creation for stakeholders, customer and employees. Founded in 1986 by Ron Burkle, the firm has completed mergers and acquisitions valued at more than $40 billion. For more information visit www.yucaipaco.com.
About Cain Hoy
•Cain Hoy Enterprises is a private investment company financed with permanent capital that owns a diversified portfolio of real estate investments.
•Cain Hoy won Financier of the Year at the Property Week Property Awards 2015 and Residential Financier of the Year at the RESI Awards.
•Further information is available at www.cainhoyenterprises.com.
http://www.prnewswire.com/news-releases/sbe-completes-acquisition-of-morgans-hotel-group-300371460.html#continue-jump
Enterprising Investor
8 년 전
Morgans Receives Revised Takeover Proposal and Will Adjourn Special Meeting of Stockholders to Evaluate (9/14/16)
The Morgans Board has not made any change in its recommendation in favor of the merger with SBEEG Holdings, LLC
NEW YORK, Sept. 14, 2016 (GLOBE NEWSWIRE) -- Morgans Hotel Group Co. (NASDAQ:MHGC) today announced that it has received a letter dated September 13, 2016, the redacted text of which is included in this press release, from the group identified in Morgans’ proxy materials as “Bidder V.” This letter reconfirms the interest of Bidder V in pursuing an acquisition of the common stock of Morgans for $2.75 per share. As part of its submission, Bidder V also furnished to Morgans a letter of intent from a new potential financing source which indicated that this financing source is prepared, subject to due diligence and definitive documentation, to provide up to $500 million in capital to support the transaction. Bidder V also provided to Morgans an executed non-disclosure agreement in the form previously requested by Morgans.
As disclosed in proxy materials previously filed by Morgans with the SEC, Bidder V had, on July 18, 2016, submitted an unsolicited, preliminary proposal for an acquisition of the common stock at $2.75 per share. Subsequent to July 18, 2016, members of management of Morgans, individual Board members and the Company’s legal and financial advisors had reached out on various occasions and had discussions with Bidder V and its representatives to encourage Bidder V to execute a non-disclosure agreement and to work towards a definitive proposal, and to do so in a timely fashion given the rapidly approaching date (September 14, 2016) for the stockholder vote on the SBE transaction. However, Bidder V had declined to sign a non-disclosure agreement in the form required by Morgans and had not made any further proposal to Morgans following its preliminary proposal. On September 8, 2016, Bidder V had contacted a member of the Board to indicate that Bidder V was continuing to work on a proposal, but no proposal was received until the evening of September 13, 2016.
At a meeting of the Board of Directors on the morning of September 14, 2016, the members of the Board present (who did not include Brad Nugent, who recused himself), concluded after receiving advice from Morgans’ legal advisors that, in light of the latest proposal from Bidder V, Morgans is required to adjourn the special meeting of stockholders scheduled for 2:00 p.m., Eastern time, on September 14, 2016, in order to allow stockholders additional time to consider supplemental disclosures regarding the latest proposal from Bidder V. This adjournment will also allow the Board and its advisors, consistent with the Board’s fiduciary obligations to evaluate any third party proposal that would reasonably be expected to lead to a superior proposal, to obtain, and provide to stockholders, additional information concerning the proposal by Bidder V. Accordingly, at today’s special meeting of stockholders, Morgans will adjourn the meeting until 2:00, p.m., Eastern Daylight Time, on September 26, 2016, at Hudson hotel, 358 West 58th Street, New York, NY 10019.
At today’s Board meeting, the Board noted that there are significant concerns with regard to the certainty and timing of any potential transaction with Bidder V, including concerns relating to the credibility and financial capacity of Bidder V and its financing source, and Bidder V’s ability to assume or refinance Morgans’ existing mortgage debt and otherwise to obtain the necessary financing to consummate a transaction. The Board noted that almost two months have passed since the initial proposal by Bidder V, Bidder V has not addressed these significant concerns during that time period and Bidder V’s proposed financing source differs from Bidder V’s initial proposal. The Board directed its legal and financial advisers to assist the Board in discussions with Bidder V, its financing source and representatives in order to obtain additional relevant information and to make an appropriate recommendation to the stockholders of Morgans. Morgans and its advisers intend to engage promptly in these discussions, and to keep stockholders informed of material developments in this regard. However, there can be no assurance that Bidder V will deliver, or be able to deliver, a definitive proposal at a price of $2.75 per share, nor as to what action the Board may take with respect to any such proposal. As of the date hereof, the Board of Directors of Morgans has not made, nor does it currently propose to make, any change in its recommendation in favor of the proposed merger with SBEEG Holdings, LLC.
A redacted form of the September 13 letter from Bidder V follows.
September 13, 2016
Howard M. Lorber
Chairman of the Board of Directors
Morgans Hotel Group Co.
475 Tenth Avenue
New York, NY 10018
Dear Mr. Lorber:
Following our letter of July 18 (the “July 18 Letter”), [REDACTED] and our affiliate [REDACTED] have continued to work with potential financing sources in order to complete the work necessary to formulate a definitive bid to acquire Morgans Hotel Group Co. (“MHGC”). We are writing to reaffirm our proposal to acquire 100% of MHGC’s common stock at an all cash price of $2.75 per share. We recognize that you have scheduled a stockholder meeting for tomorrow, but we believe that your stockholders will find our proposal more attractive than the transaction with SBE to be considered at that meeting.
We are now working with [REDACTED] and are pleased to present this proposal. [REDACTED] has committed to provide the full amount necessary to complete the transaction pursuant to the attached letter. As I’m sure you are aware, [REDACTED].
As mentioned in the July 18 Letter, we anticipate redeeming in full MHGC’s outstanding Series A Preferred Securities, including the liquidation preference plus any accrued distributions and anticipate assuming or refinancing MHGC’s outstanding mortgage debt. In addition, concurrently with entering into definitive documentation, we would be willing to pay the termination fee payable by MHGC under the merger agreement with SBE.
Given the work we have done to date and our knowledge of MHGC and the industry, our remaining due diligence requirements are confirmatory only and, with your cooperation, can be completed in very short order. We have attached an executed version of the confidentiality agreement that was negotiated with your counsel and are prepared to move expeditiously to reach agreement on transaction terms as soon as possible. We anticipate we will be in a position to promptly execute definitive documentation on substantially similar terms to those contained in the merger agreement with SBE, subject to any necessary changes to reflect our transaction and obviously with at least the level of deal certainty that you have with SBE.
This letter does not create any binding obligation on the part of either us or MHGC. No such obligation will exist until a mutually acceptable definitive agreement is executed and delivered. We would ask that you keep the terms and existence of this letter confidential.
We are eager to start moving forward on this mutually beneficial transaction, and to that end look forward to your response by September 14, 2016.
Sincerely,
[REDACTED]
[REDACTED]
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ:MHGC) is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. The Morgans Hotel Group portfolio includes Delano in South Beach and Las Vegas; Mondrian in Los Angeles, London and South Beach; Hudson, Morgans and Royalton in New York; Clift in San Francisco; Shore Club in South Beach; Sanderson and St Martins Lane in London; and 10 Karaköy in Istanbul, Turkey. Morgans Hotel Group has ownership interests in some of these hotels. Morgans Hotel Group has other hotels in various stages of development to be operated under management agreements, including three hotels under construction: Mondrian in Doha and Dubai, and Delano in Dubai. For more information please visit www.morganshotelgroup.com.
https://globenewswire.com/news-release/2016/09/14/871890/0/en/Morgans-Receives-Revised-Takeover-Proposal-and-Will-Adjourn-Special-Meeting-of-Stockholders-to-Evaluate.html
Enterprising Investor
8 년 전
Potential hotel buyer backs out in fear of Ron Burkle (8/15/16)
By Josh Kosman
Ron Burkle can rest easier when it comes to Morgans Hotel Group.
A potential bidder for the boutique hotel chain — whose $3-a-share proposal for the business would have trumped a rival offer from a Burkle group — has backed down rather than risk a battle with the billionaire investor, The Post has learned.
The suitor fretted that Burkle, who holds veto power over significant Morgans asset sales, would prove to be a roadblock to any deal other than his own, said a source close to the situation.
“They are stepping back because life is too short,” the source said.
Burkle appears close to nabbing Morgans after a seven-year saga. The billionaire and Sam Nazarian’s SBE Entertainment Group have offered $2.25 a share for the hotel chain that includes the Hudson in Columbus Circle and the Delano South Beach.
Shareholders must vote on the deal, which values Morgans at around $800 million, by Sept. 14. As of last week, Morgans said stockholders representing 29 percent of its outstanding shares had voted for it.
Under the terms, Burkle’s Yucaipa Cos. will exchange $75 million in preferred securities, dividends and warrants for an equity stake in SBE, and leasehold interests in three Las Vegas restaurants held by Morgans.
Last month, Morgans disclosed that another bidder, which it identified only as “Bidder V,” had surfaced with a $2.75 per share offer to acquire the company. That Asia-based suitor made a non-binding bid and is still looking over the books, a source said.
Burkle, part owner of the NHL’s Pittsburgh Penguins, tried to buy the Ian Schrager-founded chain once before in 2015 but was blocked by Jason Kalisman, a Morgans board member and Taubman family real estate scion.
Burkle’s interest in the hotel operator dates back to 2009, when Yucaipa loaned $75 million to a desperate Morgans during the financial crisis.
Seven years later that deal still haunts the hotel chain. The dividend rate on Burkle’s preferreds is set to double, to 20 percent, on Oct. 18 — and the company has no means of repaying the loan.
That same deal also gave Burkle the right to block significant asset sales through warrants that can be exercised at $6 a share.
To remove Burkle’s veto power, a rival bidder could buy the debt securities for around $136 million after factoring in interest payments. But that still leaves the issue of the warrants, which can only be bought from Burkle if he’s willing to sell.
The suitor ready to offer roughly $3 a share for Morgans believed the argument could be made that Burkle’s warrants are so out of the money that he can’t exercise those veto rights, sources said. Morgans shares closed Friday at $2.28.
A Yucaipa spokesman said no suitor has contacted Burkle to see if he would exercise his warrant veto rights.
However, a source familiar with Burkle’s thinking said, “He believes his warrants carry their rights regardless of the stock price.”
Ultimately, the prospective suitor decided to walk rather than challenge Burkle.
A Morgans spokesman declined to comment.
http://nypost.com/2016/08/15/potential-hotel-buyer-backs-out-in-fear-of-ron-burkle/
Enterprising Investor
8 년 전
MHGC Receives Unsolicitated Proposal (7/26/16)
The following language is hereby added as a new paragraph at the end of this section captioned “Special Factors – Background of the Merger”:
On July 18, 2016, the Company received an unsolicited written proposal from a party we refer to as Bidder V. The proposal proposed an acquisition of the Company’s common stock at an all cash purchase price of $2.75 per share, and stated that Bidder V anticipated redeeming the Company’s Series A preferred securities at their liquidation value plus accrued distributions and was committed to work to assume or refinance the Company’s mortgage debt. Bidder V stated that it intended to finance the acquisition entirely with equity, and enclosed a non-binding letter of intent from a financial institution expressing an agreement in principle to provide up to $250 million in equity financing to support Bidder V’s proposed transaction.
On July 19, 2016, the Board (excluding Bradford Nugent and Howard Lorber, who recused themselves) met to consider the proposal from Bidder V. After consulting with its legal and financial advisors, the Board determined that the Bidder V proposal would reasonably be expected to lead to a “Superior Monroe Proposal” within the meaning of the merger agreement, and that, consistent with its fiduciary duties, it should engage in discussions with Bidder V, subject to and in compliance with the requirements of the merger agreement. Later that day, Fried Frank furnished a form of non-disclosure agreement conforming to the requirements of the merger agreement to counsel to Bidder V. Fried Frank and counsel to Bidder V are in the process of finalizing a non-disclosure agreement.
Also on July 19, 2016, Bidder U requested a waiver from the Company of certain restrictions under its non-disclosure agreement for the purpose of engaging in discussions with the Board, Yucaipa and OTK Associates with respect to Bidder U’s proposal. On July 21, 2016, the Board (excluding Bradford Nugent and Howard Lorber, who recused themselves) met to consider the request from Bidder U. After consulting with its legal and financial advisors, the Board determined in accordance with the provisions of the merger agreement to grant Bidder U the requested waivers. Each of Yucaipa and OTK Associates is subject to agreements with SBE that limit the ability of such parties to engage in discussions with third parties, and the granting of waivers by the Board under the non-disclosure agreement with Bidder U is not intended to, and does not, affect the obligations of Yucaipa and OTK Associates under their agreements with SBE.
https://www.sec.gov/Archives/edgar/data/1342126/000119312516657386/d212820ddefa14a.htm
Gravity
9 년 전
Item 2. Identity and Background.
(a)-(c) This statement is being filed by OTK Associates, LLC, a Delaware limited liability company (“OTK”), and its managers, Robert S. Taubman and Michael E. Olshan. OTK was formed under the laws of the State of Delaware and is an investment entity. OTK’s business and principal office address is 200 E. Long Lake Road, Suite 300, Bloomfield Hills, Michigan 48304.
Robert S. Taubman’s present principal occupation or employment is Chairman of the Board, and President and Chief Executive Officer of Taubman Centers, Inc., a real estate investment trust, and The Taubman Company LLC, which provides property management, leasing, development and other administrative services to, among others, Taubman Centers, Inc. and its shopping centers. Robert S. Taubman’s, Taubman Centers, Inc.’s and The Taubman Company LLC’s business and principal office address is 200 E. Long Lake Road, Suite 300, Bloomfield Hills, Michigan 48304.
Michael E. Olshan’s present principal occupation or employment is Chairman and Managing Partner of O-CAP Management, L.P., a hedge fund. Michael E. Olshan’s and O-CAP Management, L.P.’s business and principal office address is 600 Madison Avenue, 14 th Floor, New York, New York 10022.
(d)-(e) During the past five years, none of the Reporting Persons (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) OTK is a limited liability company organized under the laws of Delaware. Robert S. Taubman and Michael E. Olshan are citizens of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
4,500,000 Common Shares were purchased by OTK from its working capital. OTK received funds through contributions of capital from its initial members.
Item 4. Purpose of Transaction.
On May 9, 2016, OTK and SBEEG Holdings, LLC (“Parent”) entered into a Voting Agreement (the “Voting Agreement”) relating to the proposed acquisition of the Issuer by Parent pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of May 9, 2016, by and among the Issuer, Parent, and Trousdale Acquisition Sub, Inc. (“Merger Sub”). The Merger Agreement provides that, subject to the terms and conditions thereof, including the adoption and approval of the Merger Agreement by the requisite vote of the Issuer’s stockholders, Merger Sub will be merged with and into the Issuer (the “Merger”) with the Issuer continuing as the surviving corporation in the Merger, and each outstanding Common Share will cease to be outstanding and will be converted into the right to receive $2.25 in cash.
Enterprising Investor
9 년 전
SBE Acquisition Of Morgans Hotel Group Will Create Global, Fully Integrated Lifestyle Hospitality Platform (5/09/16)
SBE broadens portfolio to include 20 world-class lifestyle hotel properties and more than 90 world-renowned entertainment and food & beverage offerings
Cain Hoy Enterprises to contribute to recapitalization; Yucaipa Companies to take significant equity stake in SBE
Jonathan Goldstein and Ron Burkle to join Sam Nazarian on SBE Board of Directors
LOS ANGELES, May 9, 2016 /PRNewswire/ -- SBE today announced a definitive agreement to acquire Morgans Hotel Group in an all-cash transaction, a move that will further strengthen SBE's position as a global leader in lifestyle hospitality management, entertainment, food & beverage, and development.
With the acquisition, SBE will add Morgans' collection of iconic brands and 13 domestic and international hotel management agreements to its own portfolio, which include such imprints as SLS, Hyde, and The Redbury hotels, as well as such venues as Katsuya, Cleo, The Bazaar by José Andrés, Hyde Lounge and Umami Burger. In addition, SBE expects to add an additional five hotel properties by the end of 2016 with the planned opening of SLS Brickell in Miami, Townhouse Hotel in Miami Beach, SLS Park Avenue in New York City, Hyde Hallandale in Florida and a planned hotel in the pipeline for the Mondrian Doha, for a total of 25 hotels by the end of this year.
SBE will also take direct ownership of the 194-room Delano Hotel in South Beach, the 878-room Hudson Hotel in New York City and the 372-room Clift Hotel in San Francisco.
As part of the transaction, SBE is receiving a significant investment from Cain Hoy Enterprises, a global real estate investment company headed by Jonathan Goldstein. In addition, The Yucaipa Companies will convert its existing stake in Morgans into an ownership interest in SBE.
SBE Founder, Chairman and CEO Sam Nazarian will retain majority ownership interest in SBE as well as all day-to-day management responsibilities.
"We have long admired Morgans, its impressive history and culture of service and innovation, so we're delighted to reach an agreement on this transaction, " Nazarian said. "Our strategic vision is to operate these amazing and unique lifestyle properties in key international gateway markets, and Morgans' hotels, along with their talented team, fit perfectly within that vision."
After completion of the Morgans acquisition, SBE will feature an unparalleled portfolio of 20 world-class lifestyle hotel properties with more than 6,000 keys in nine attractive markets and more than 90 world-renowned entertainment and food & beverage offerings.
SBE, founded by Nazarian in 2002, is a proven leader in the hospitality and real estate industries, with more than 100 properties currently operating or in development. SBE operates a global hotel, residential, food-and-entertainment and nightlife collection with premier brands such as The Bazaar by José Andrés and Hyde Lounge, paired with internal development, marketing, sponsorship and loyalty platform THE CODE. SBE also operates a robust residential business and an international development and design firm, Dakota Development.
Morgans Hotel Group was founded in 1984 and is widely credited as the creator of the first "boutique" hotel. It operates Delano in South Beach; Mondrian in Los Angeles, New York, South Beach and London; Hudson in New York; Morgans and Royalton in New York; Clift in San Francisco; Shore Club in South Beach, and Sanderson and St. Martins Lane in London, and has licensed a Delano in Las Vegas and a franchised hotel, 10 Karaköy, in Istanbul, Turkey.
SBE already has a robust pipeline of 19 new hotels in development, comprising 4,500 keys, 3,800 of which are signed, under construction, or have an executed LOI, scheduled to open through 2019.
When combined with the Morgans portfolio, SBE will expand its existing geographic diversity, giving it a larger global footprint. SBE expects to integrate its brands and revenue-driven strategies throughout the Morgans portfolio, including its cutting-edge marketing and sponsorship platforms, innovative customer loyalty programs and residential, timeshare and hotel development and design operations.
"SBE will leverage best-in-class brands across the combined company,'' Nazarian said, "further driving both short- and long-term revenue growth. We are very exited about the opportunities ahead.''
In addition, the investment led by Cain Hoy will give SBE significantly improved financial strength and more flexibility to pursue growth opportunities. Nazarian adds: "SBE intends to invest significant funds to revitalize the three Morgans-owned properties, Delano, Hudson and Clift."
"Sam Nazarian and SBE are industry leaders in the lifestyle hospitality sector,'' said Jonathan Goldstein of Cain Hoy. "The Morgans portfolio is an ideal addition to SBE's existing stable of iconic brands. We are confident that Sam's keen management team will leverage this acquisition into strong growth.''
Yucaipa founder Ron Burkle expressed his solid support for SBE and the Morgans acquisition.
"Sam Nazarian is a best-in-class operator in the hospitality space," Burkle added. "Sam and his team will bring their creativity, strategy and discipline to Morgans' iconic portfolio, helping define the boutique hotel space for years to come."
Concluded Nazarian, "I am thrilled that this transaction allows me to continue my relationship with both Jonathan Goldstein, who has become a valued partner, as well as my long-time friend and a titan in our industry, Ron Burkle, with Yucaipa's growing portfolio of world-class hospitality assets in Soho House, Sydell Group and Discovery Land Company. Our acquisition of Morgans will allow SBE to become a truly disruptive and value-add force across all platforms of hospitality, residential, entertainment, F&B and development."
About SBE
SBE is a leading global lifestyle hospitality company that develops, manages and operates award-winning hotels, restaurants and nightclubs. Through exclusive partnerships with cultural visionaries, SBE is dedicated to delivering the best in design, culinary and entertainment. Already a proven leader in the hospitality and real estate industries, SBE has more than 90 properties currently operating or in development, and has expanded several of its flagship brands, including SLS Hotels, The Bazaar by José Andrés, Hyde Lounge and The Redbury, nationally and internationally. Founded in 2002 by Chairman and CEO Sam Nazarian, SBE is a privately held company. More information about SBE can be obtained at sbe.com or by downloading the SBE App.
http://www.prnewswire.com/news-releases/sbe-acquisition-of-morgans-hotel-group-will-create-global-fully-integrated-lifestyle-hospitality-platform-300265295.html
Enterprising Investor
9 년 전
Morgans Hotel Group Reports First Quarter 2016 Results (5/09/16)
NEW YORK, May 09, 2016 (GLOBE NEWSWIRE) -- Morgans Hotel Group Co. (NASDAQ:MHGC) (the “Company” or “Morgans”) today reported financial results, in constant dollars where applicable, for the quarter ended March 31, 2016.
First Quarter 2016 Operating Results
Adjusted EBITDA, defined below, excluding the Company’s ownership interests in TLG and Mondrian SoHo, which the Company no longer held effective during the first quarter of 2015, was $8.1 million in the first quarter of 2016, compared to $9.5 million for the same period in 2015, a decrease of 14.5%. Adjusted EBITDA for the first quarter of 2015, including the ownership interests in TLG and Mondrian SoHo, was $9.7 million.
RevPAR at System-Wide Comparable Hotels decreased by 4.2% in the first quarter of 2016 as compared to the same period in 2015, due to a 7.7% decrease in average daily rate (“ADR”) offset by a 3.8% increase in occupancy. System-Wide Comparable Hotels room revenues plus resort and facility fees, which are not included in RevPAR, decreased by 2.3% quarter over quarter.
RevPAR from System-Wide Comparable Hotels in New York decreased 5.0% in the first quarter of 2016 as compared to the same period in 2015, due to a 5.6% decrease in ADR slightly offset by a 0.7% increase in occupancy. RevPAR at Hudson decreased 6.8% during the first quarter of 2016 as compared to the same period in 2015, driven by a 7.0% ADR decrease primarily due to new supply in New York City. Including facility fees, room revenues at Hudson decreased 4.2% quarter over quarter.
RevPAR from System-Wide Comparable Hotels in Miami decreased 16.0% in the first quarter of 2016 as compared to the first quarter of 2015 driven by an 18.3% decrease in ADR. Delano South Beach experienced a RevPAR decrease of 9.7% during the first quarter of 2016 as compared to the same period in 2015, due to a 15.0% decrease in ADR, which was primarily the result of new supply in South Beach. Including resort fees, rooms revenues at Delano decreased 7.2% quarter over quarter.
Clift’s RevPAR increased 7.9% in the first quarter of 2016 as compared to the first quarter of 2015 due to a 5.2% increase in occupancy and a 2.6% increase in ADR.
RevPAR from System-Wide Comparable Hotels in London, which includes Sanderson and Mondrian London, increased 9.8% during the first quarter of 2016 as compared to the same period in 2015, driven by an 11.9% increase in occupancy. St Martins Lane continues to be non-comparable, as the hotel was under major renovation in the first half of 2015.
Management fees decreased by $0.9 million in the first quarter of 2016 as compared to the same period in 2015 due primarily to the loss of Mondrian SoHo in April 2015 and the sale of TLG in January 2015. On a comparable basis, management fees decreased $0.2 million, or 6.9%.
Corporate expenses, excluding stock compensation expenses, decreased by $1.5 million, or 27.0% in the first quarter of 2016 as compared to the same period in 2015 primarily due to open positions and cost controls.
The Company recorded a net loss of $8.9 million in the first quarter of 2016 compared to a net loss of $12.8 million in the first quarter of 2015, primarily as a result of an impairment that the Company recorded in the first quarter of 2015.
Balance Sheet
The Company’s consolidated debt as of March 31, 2016, net of deferred financing costs of $4.0 million, was $574.3 million, which includes $101.9 million of capital lease obligations primarily related to Clift. Outstanding Series A preferred securities and undeclared dividends totaled $133.9 million.
At March 31, 2016, the Company had approximately $11.9 million in cash and cash equivalents and $15.3 million in restricted cash.
As of March 31, 2016, the Company had approximately $443.2 million of remaining Federal tax net operating loss carryforwards to offset future income.
Announced Sale of the Company
Separately, on May 9, 2016, and as described in the Form 8-K filed with the SEC on May 9, 2016, the Company entered into a definitive agreement under which the Company will be acquired by SBEEG Holdings LLC (“SBE”), a leading global lifestyle hospitality company. Under the terms of the agreement, SBE will acquire all of the outstanding shares of the Company’s common stock for $2.25 per share in cash. As part of the transaction, affiliates of The Yucaipa Companies (“Yucaipa”) will exchange $75.0 million of Series A preferred securities, accrued preferred dividends, and warrants for $75.0 million in preferred shares and an interest in the common equity in the acquirer and, following the closing, the leasehold interests in three restaurants in Las Vegas currently held by Morgans. The transaction, which was approved by the Company’s Board of Directors, is expected to close in the third or fourth quarter, and is subject to regulatory approvals, the assumption or refinancing of the Company’s mortgage loan agreements, and customary closing conditions, including approval of the transaction by the Company’s shareholders. Morgans shareholders representing approximately 29% of the Company’s outstanding shares of common stock have signed voting agreements in support of this transaction, including OTK Associates, Pine River Capital Management and Vector Group Ltd. Affiliates of Yucaipa have also signed a voting agreement in respect of their Series A preferred securities and warrants.
Investor Conference Call
In light of the Company’s announcement of the proposed acquisition by SBE, the Company’s first quarter earnings call, previously scheduled for today at 5:00 PM Eastern Time, has been cancelled.
Additional Definitions
“Adjusted EBITDA” means adjusted earnings before interest, taxes, depreciation and amortization, as further defined below.
“EBITDA” means earnings before interest, income taxes, depreciation and amortization.
“Owned Hotels” means Hudson in New York, Delano South Beach in Miami Beach and Clift in San Francisco, which the Company leases under a long-term lease.
“System-Wide Comparable Hotels” means all Morgans Hotel Group branded hotels operated by the Company, except for hotels added or under major renovation during the current or the prior year period, development projects and hotels no longer managed by the Company. System-Wide Comparable Hotels for the periods ended March 31, 2016 and 2015 exclude St Martins Lane in London, which was under major renovation in the first half of 2015, Mondrian SoHo, which the Company no longer managed effective April 27, 2015, and Delano Las Vegas and 10 Karaköy, both of which are licensed/franchised hotels.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ:MHGC) is widely credited as the creator of the first “boutique” hotel and a continuing leader of the hotel industry’s boutique sector. Morgans Hotel Group operates Delano in South Beach, Mondrian in Los Angeles, South Beach and London, Hudson in New York, Morgans and Royalton in New York, Clift in San Francisco, Shore Club in South Beach and Sanderson and St Martins Lane in London. Morgans Hotel Group has ownership interests in several of these hotels. Morgans Hotel Group also licenses its brand through Delano in Las Vegas and 10 Karaköy in Istanbul, Turkey. Morgans Hotel Group has other hotels in various stages of development to be operated under management or franchise agreements, including a Mondrian property in Doha, Qatar and a Delano in Dubai. For more information please visit www.morganshotelgroup.com.
[tables deleted]
http://globenewswire.com/news-release/2016/05/09/837889/0/en/Morgans-Hotel-Group-Reports-First-Quarter-2016-Results.html
Enterprising Investor
9 년 전
SBE to Acquire Morgans Hotel Group (5/09/16)
Morgans Hotel Group Co. (NASDAQ:MHGC), (“Morgans”) today announced it has entered into a definitive agreement under which Morgans will be acquired by leading global lifestyle hospitality company SBE. Under terms of the agreement, SBE will acquire all of the outstanding shares of Morgans common stock for $2.25 per share in cash, which, together with the exchange of Morgans Series A preferred securities, the assumption of debt and transfer of capitalized leases, represents a total enterprise value of approximately $794 million. The per share price represents a 69 percent premium over Morgans’ unaffected closing price on May 5, 2016, and a 54 percent premium to Morgans’ volume weighted average price for the 30 days up to and including May 5, 2016.
As part of the transaction, affiliates of The Yucaipa Companies will exchange $75 million in Series A preferred securities, accrued preferred dividends, and warrants for $75 million in preferred shares and an interest in the common equity in the acquirer and, following the closing, the leasehold interests in three restaurants in Las Vegas currently held by Morgans.
At closing, SBE will acquire Morgans’ portfolio of thirteen owned, operated or licensed hotel properties in London, Los Angeles, New York, Miami, San Francisco, Las Vegas and Istanbul, including its Hudson New York and Delano South Beach properties. SBE is currently working with the lenders to assume the mortgages of the Hudson and Delano properties, approximately $422 million, and expects this to occur at closing.
Howard M. Lorber, Morgans Chairman, said, “Morgans’ Board of Directors carefully considered all of the alternatives available to us and we are pleased to have arrived at a transaction that we believe is in the best interests of our shareholders, while providing a great home for our attractive assets under a renowned hospitality company in SBE.”
The transaction, which was approved by the Board of Directors, is expected to close in the third or fourth quarter, and is subject to regulatory approvals, the assumption or refinancing of Morgans’ mortgage loan agreements, and customary closing conditions, including approval of the transaction by Morgans shareholders. Morgans shareholders representing approximately 29 percent of the Company’s outstanding shares of common stock have signed voting agreements in support of this transaction, including OTK Associates, Pine River Capital Management and Vector Group Ltd. Affiliates of The Yucaipa Companies have also signed a voting agreement in respect of their Series A preferred securities and warrants.
SBE has obtained commitments to finance the transaction through a combination of proceeds from the sale of new preferred equity in the newly-formed company to a third-party investor, liquidity from the refinancing of its existing term loans and a new revolver.
In light of today’s announcement, the Company’s first quarter earnings call, previously scheduled for today at 5:00 PM Eastern Time (U.S.) has been cancelled.
Morgan Stanley & Co. LLC served as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP served as legal advisors to Morgans Hotel Group.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ:MHGC) is widely credited as the creator of the first “boutique” hotel and a continuing leader of the hotel industry’s boutique sector. Morgans Hotel Group operates Delano in South Beach, Mondrian in Los Angeles, South Beach and London, Hudson in New York, Morgans and Royalton in New York, Clift in San Francisco, Shore Club in South Beach and Sanderson and St Martins Lane in London. Morgans Hotel Group has ownership interests or owns several of these hotels. Morgans Hotel Group also licenses its brand through Delano in Las Vegas and 10 Karaköy in Istanbul, Turkey. Morgans Hotel Group has other hotels in various stages of development to be operated under management or franchise agreements, including a Mondrian property in Doha, Qatar and a Delano in Dubai. For more information please visit www.morganshotelgroup.com.
Important Information About the Transaction and Where to Find It
In connection with the proposed transaction, Morgans will file with the Securities and Exchange Commission (“SEC”) a proxy statement. Morgans may also file other documents with the SEC regarding the proposed transaction. MORGANS STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Morgans stockholders may obtain free copies of the proxy statement (when available) and other documents filed with the SEC by Morgans through the web site maintained by the SEC at www.sec.gov or by contacting the investor relations department of Morgans at (212) 277-4188.
Participants in the Solicitation
Morgans and its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Morgans is contained in Morgans’ Form 10-K for the year ended December 31, 2015 and its proxy statement filed on April 15, 2016, which are filed with the SEC. Information regarding the identity of the potential participants, and their direct or indirect interests in the transaction, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with SEC in connection with the transaction.
Legal Notice Regarding Forward-Looking Statements
This press release, and the documents to which Morgans refers in this communication, contain not only historical information, but also forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Morgans’ expectations or beliefs concerning future events, including the timing of the transaction and other information relating to the transaction. Forward-looking statements include information concerning possible or assumed future results of operations of Morgans, the expected completion and timing of the transaction and other information relating to the transaction. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “intends,” “forecasts,” “should,” “estimates,” “contemplate,” “future,” “goal,” “potential,” “predict,” “project,” “projection,” “may,” “will,” “could,” “should,” “would,” “assuming” and similar expressions are intended to identify forward-looking statements. You should read statements that contain these words carefully. They discuss Morgans’ future expectations or state other forward-looking information and may involve known and unknown risks over which Morgans has no control. Those risks include, (i) the risk that the transaction may not be completed in a timely manner or at all, including by reason of the unavailability of financing, which may adversely affect Morgans’ business and the price of the common stock of Morgans, (ii) the failure to satisfy any of the conditions to the consummation of the transaction, including the adoption of the acquisition agreement by the stockholders of Morgans, the assumption or refinancing of Morgans’ mortgage loan agreements and the receipt of governmental and regulatory approvals, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the acquisition agreement, (iv) the effect of the announcement or pendency of the transaction on Morgans’ business relationships, operating results and business generally, (v) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the transaction, (vi) risks related to diverting management’s attention from Morgans’ ongoing business operations and (vii) the outcome of any legal proceedings that may be instituted against us related to the acquisition agreement or the transaction. Forward-looking statements speak only as of the date of this communication or the date of any document incorporated by reference in this document. Except as required by applicable law or regulation, Morgans does not undertake to update these forward-looking statements to reflect future events or circumstances.
Contacts:
Investors
Richard Szymanski
Morgans Hotel Group Co.
212.277.4188
Media
Stephanie Pillersdorf/Pamela Greene/Patrick Scanlan
Sard Verbinnen & Co
212.687.8080
Enterprising Investor
9 년 전
Miami Beach - America's sexiest metropolis (5/06/16)
by Patti Nickell
MIAMI BEACH -- This just may be America's sexiest city -- a symphony of sand, surf and sherbet-colored sunrises set to a sassy salsa beat. It is palm trees and pulsating nightlife; torpid days and tropical nights; shimmering pools and shimmying revelers.
Can you imagine a less glamorous city spawning "Miami Vice's" Sonny Crockett and his linen suits or "C.S.I. Miami's" Horatio Caine and his signature sunglasses?
The epicenter of all this glamor is South Beach -- a slice of sand along Ocean Drive, and an accompanying collection of Art Deco buildings (housing mostly hotels and restaurants) along parallel Collins Avenue -- that attracts the rich and famous from around the world.
From Muhammad Ali to Madonna, Joe Namath to Jennifer Lopez, Gianni Versace to Gloria Estefan -- they've all become part of the fabric of the South Beach scene.
If you want to weave your own threads into that fabric, there's no better place to start than at the Delano Hotel. The 1947 Art Deco building on Collins Avenue became Miami's first boutique hotel in 1994, an early collaboration between Ian Schrager and Philippe Starck.
From the billowing white curtains on the front terrace to the oversize chess board on the palm-lined back lawn, everything is carefully designed to evoke an "Alice in Wonderland" fantasy. I didn't think I would have been at all surprised to spot the white rabbit nursing a gin and tonic in the elegant Rose Bar, or to see the Red Queen lounging by the oft-photographed pool (or as they like to refer to it, the water salon).
The Delano, a member of Morgans Hotel Group, is a work of art in every sense -- from the all-white decor of the rooms to the original Brazilian rosewood floors to the daily inspirational quote scrawled on a mirror opposite the elevator bank.
This may be figurative art, but there is real art as well. Director of Housekeeping Tony Costello, whose passion for the Delano knows no limits, will happily take guests on a guided tour if they request it.
He'll point out an original Salvador Dali chair across the lobby from a delicate Murano chandelier (every piece of glass in the hotel is Murano), and he'll indicate an unobtrusive chair which might go unnoticed until he reveals it was designed by Antoni Gaudi, who also designed the fanciful La Sagreda Familia Cathedral in Barcelona.
If there's a property in South Beach to rival the Delano, it's the Villa Casa Causarina, the former mansion of Italian fashion designer Gianni Versace, and now a boutique hotel. A cross between a Moorish palace, a Venetian palazzo and a Spanish hacienda, the Villa is the third most visited house in America (after Graceland and the White House).
That is largely due to the fact that it was on the front steps of the mansion that Versace was shot to death on July 15, 1997, after returning from an early morning walk to get a newspaper. At any time of day or night, a horde of curious onlookers can be found trying to snap photos of the house.
If you want to get a peek at the inside, however, you will have to book one of the 10 rooms (all with original details such as mosaics, handpainted murals and colored tiles) or make a reservation for dinner at Gianni's Restaurant (located in the designer's former dining room).
I stayed for two nights and during that time had a chance to see both the Medallion Suite, which even though the smallest of the bedrooms, was Elton John's favorite, and the Mosaic Suite, formerly the bedroom of Versace's sister Donatella when she was in town. Alas, I didn't get to see Gianni's bedroom as it was booked.
Dining and wining
If there's one thing you don't want to skimp on in South Beach it's eating and drinking. Both the Delano and the Villa have first-rate fine dining restaurants. At the former, it's Bianca, which features modern Italian fare. Whatever else you order, don't miss the appetizer portion (large enough to share) of the Big Eye Tuna Pizza -- truly one of the best things I've eaten lately.
At the latter, you can dine in either Versace's former dining room or al fresco poolside. The menu is Italian/Mediterranean, and should you happen to have an extra few hundred bucks in your pocket, there's a Caviar by Petrossian menu as well.
Save another night for the Sarsaparilla Club in the Shelborne Hotel. The club is known for what is billed as "American dim sum" -- meaning such delectable dishes as drunken deviled eggs with pickled roots, heirloom tomatoes with ricotta, tomato sorbet, basil and crisp olive oil toast, and my favorite, Corn 4 Ways (grilled sweet corn, cornbread butter, cornbread crumbles and lemon popcorn).
If you want dim sum the Asian way in an eye-catching decor, book a table at Komodo in downtown Miami. Glamorous and sexy are the key words at Komodo. You might remember what you ate, but one thing you'll never forget is the setting, especially if you opt for the outdoor tropical garden with elevated tables known as bird's nests.
Other great options are Sunday brunch at Prime Fish (the most extensive and innovative array of buffet dishes I've ever seen -- ever heard of lasagna pancakes?) and KYU (pronounced cue) in the Wynwood Arts and Design District, where small plates such as roasted cauliflower with goat cheese and heirloom tomatoes with chiles, red onion and shiso had my friends and I practically fighting over the last morsel.
Miami Beach certainly has a lively (and loud) club scene, with no shortage of places where revelers can dance the night away. But it has also gained a reputation as one of America's best cities to experience a classic cocktail culture.
The Regent Cocktail Club in the Gale Hotel is an intimate spot reminiscent of a 1940s lounge, or on nights when a Latin combo is playing, a bar in old Havana. This is definitely the spot for cocktails and conversation, but get there early as intimate means just that.
My favorite South Beach watering hole has to be the Delano's Rose Bar, sophisticated and sleek, with a backlit bar, Venetian chandeliers and the best spot in the hotel for people watching. Then, there are the cocktails themselves.
Both the Regent Cocktail Club and the Rose Bar take the art of cocktail mixing to a new level.
Finally, what's a glamorous getaway without a day of spa pampering? Whether it's hot stone therapy or a lavender-scented scrub you're after, or just a relaxing massage, South Beach has a spa for you.
Two of the best -- the rooftop Agua at the Delano (request Elizabeth for the deep tissue) and the casita complex at the Setai Hotel (the ocean view from the room only adds to the sense of serenity).
Indulge in that serenity before heading off to experience more of America's sultriest, sexiest and most sensuous city.
If you go to Miami Beach
Where to stay: The Delano Hotel, 1685 Collins Ave., delano-hotel.com; The Villa Casa Causarina, 1116 Ocean Drive; vmmiamibeach.com.
Where to eat: Sarsaparilla Club, 1 18th St.; Komodo, 801 Brickell Ave.; Prime Fish, 100 Collins Ave., mylesrestaurantgroup.com; KYU, 251 NW 25th, kyumiami.com.
Other: The Spa at the Setai Hotel, 2001 Collins Ave., thesetaihotel.com.
FYI: miamiandbeaches.com.
http://www.bradenton.com/living/article76169952.html
Enterprising Investor
9 년 전
Morgans Hotel Group Co. (MHGC) Long Thesis (3/24/16)
By VW Staff
Long thesis on Morgans Hotel Group Co. (MHGC).
Executive Summary
The assets that Morgans Hotel Group currently own are worth around $22.15 per share:
Hudson Hotel
Utilizing a base case normalized NOI of $15.30m and a cap rate of 4.50%, we value the Hudson Hotel at around $340m or $9.79 per share. NOI averaged between 25m and 35m during the boom years before the Financial Crisis, but has not reached that level since then. NOI was around 15m for the last 2 years. The Hudson Hotel enjoys a best-in-market location, just a few blocks from Columbus Circle in Manhattan. Currently, luxury hotel properties in Manhattan trade at a cap rate of between 3.5-5%.
The Delano
At a base case normalized NOI of $12.45m and cap rate of 6.00%, we value the Delano at around $208m or $6 per share. We believe our base case NOI is likely conservative, given that it was 15m last year. NOI averaged between 15m and 20m before the crisis, and has recovering to the lower end of that range. Luxury hotel properties on the South Beach generally trade at a cap rate of between 5.5-7%.
Hotel Management Contracts
In addition to the Hudson and the Delano, Morgans Hotel Group currently manages 8 additional contracts, with 1 new contract poised to come on line in 2016, and 1 due to be terminated. We believe the hotel management business can earn normalized EBIT of around 11m/year. Hotel management businesses generally trade at a multiple of between 15-30x. Our base case valuation utilizes a multiple of 16x, valuing the business at $172m or $4.95 per share.
Other Assets
We value the company’s NOL carryforward assets at $34m, or $0.98 per share. The company also has around 15m cash or $0.43 per share.
With liabilities and preferred shares of $18 per share, shares of Morgans Hotel Group are worth around $4.15 per share. Currently, MHGC Common Stock is trading at around $1.50 per share, which implies an upside of around 177%.
Our base case scenario has the company divesting its properties whilst transitioning to a purely asset light hotel management business model. This is what the company has repeatedly said it would do, and it has taken steps to effect this transaction.
The shares are trading at a steep discount due to 1) a long history of mismanagement due to conflict within the board between two feuding groups of investors, 2) investor fatigue and 3) overhang due to an unfavorable financing arrangement concluded during the Financial Crisis. We believe these issues have not diluted Morgans Hotel Group’s brand equity, which we continue to believe can be a high quality business, given appropriate changes in management.
The company has not made a GAAP profit in its lifetime as a public company. It’s collection of assets are valuable individually, but it does not make sense for the company to continue as a consolidated entity any longer. There have been calls for the company to sell itself and/or its assets for a while which have obviously not come to pass. However, there is good reason to believe that a sale will happen shortly given that dividends on its preferred shares will hike to 20% at the end of the year, and to redeem the shares will require a sale of assets.
Thus the thesis is dependent on a transaction that may not happen, however improbable that may be. The value inherent in Morgans Hotel Group’s assets may not be realized without such a transaction, so we think it is important to be cognizant of the fact that this is a higher risk higher reward situation. As a heavily leveraged entity, slight changes in enterprise value will result in large fluctuations in equity value, so mark to market volatility should be expected going forward.
Morgans Hotel Group – Overview
Morgans Hotel (“MHGC” or “the company”) owns and manages a number of luxury boutique hotel properties in the United States and around the world. Currently it owns two hotel properties, the Hudson Hotel, located a few blocks from Columbus Circle in Manhattan, New York, and the Delano, located in Miami South Beach. The hotel management segment owns the Hudson, Morgans, Mondrian and Delano brands, licenses its brands to third party operators and manages properties in the U.S. (New York, Miami and Los Angeles), Europe (London and Istanbul) and the Middle East (Doha).
There is clear value in Morgans’s assets (corroborated by the number of offers for the company at prices that are materially higher than the current market price), but it seems that the market believes that the market believes that this value will not be realized in the near future, and will eventually be squandered away by management.
Currently, there are a number of issues afflicting the company that have been priced into the stock:
- High Leverage and Cost of Capital. The company has been undercapitalized and overly leveraged since the Financial Crisis. Long term debt peaked at 699m at the end of 2008, supported by EBITDA of only 55m (for a ratio of 12.60x) and declined to 440m in 2011m only to increase again to 607m in 2014 (supported by EBITDA of around 30m, for a ratio of almost 20x). After prepaying $28.8m worth of debt, the company has around 578m of debt outstanding. The business has been continuously hampered by excessively, and in our view, unnecessarily high interest expenses and years of negative free cash flow and net losses have forced the company to pile on leverage in order to finance capital expenditure and debt repayment. In our view, this is unsustainable.
- History of GAAP losses and negative free cash flow. The company has consistently lost money on both a FCF and GAAP net income basis. In the most recent year, the company managed to lose 57m even as the U.S. hotel industry has enjoyed booming revenue and record room rates. In fact, the company has never managed to turn a GAAP profit as a public company.
- Dysfunctional board: There have been two groups publicly feuding for control over the company since 2013: one group is affiliated with Yucaipa, the company’s largest creditor, and the other with OTK, the company’s largest shareholder. The dislike between the two groups have become personal, and political loyalty rather than competence is the most important criteria for appointment onto the company’s board or as CEO. In 2013, the chairman of Yucaipa, Ron Burkle, released a letter to the public where he called Jason Kalisman of OTK a ‘little boy who should get his mother to buy him a new toy’, and OTK has refused to nominate Yucaipa’s candidate to the board after they took control, costing shareholders money. The merger between SBE and Morgans Hotel failed due to opposition from director Jason Kalisman and OTK. The board seems to have forgotten their duty to act in the best interests of shareholders, and as a result, the company’s intrinsic value has been impaired by the incessant and unceasing conflict.
- Lack of Leadership. There has been no CEO since Jason Kalisman resigned from the interim CEO post in May of 2015. The CEO search has taken an inordinate amount of time: currently 9 months and counting. During that period, no new management contracts were signed, one management contract was terminated (Shore Club), and investors have been informed that there is the possibility that additional contracts at two of the company’s landmark hotels (the company’s namesake Morgans and the Royalton) may be terminated after it is sold by its current owner. There is no reason why the search for a new CEO should take such a long time and current management (CFO Szymanski and team) has not made every effort to secure new business despite the lack of CEO.
- Management lacks credibility and investor fatigue: Despite having announced a plan to shed assets and retire debt seven years ago1, the company still owns two hotel properties, and have made no progress on that front since 2010, when three properties were sold (indeed leverage has increased since then). Execution of the purported growth strategy (growing the management contract portfolio) has been poor; currently, the number of managed hotels is actually lower than the number of hotels managed at the end of 2010. Correspondingly, revenue from the hotel management segment is also lower than it was six years ago.
After the board announced that it had 1) formed a committee to explore ‘strategic options’, 2) retained Morgan Stanley as an advisor and 3) paid director Jonathan Langer over $1m for advice on the ‘strategic process’ in the spring of 2014, no transaction, either involving the hotel properties or the entire company, was completed. In August 2015, or one year after it had announced it was considering a sale, the company announced that it was involved in merger talks with SBE, a competing boutique hotel management company. However, predictably the talks failed to materialize into anything of substance.
Time and time again, management has failed to execute on its stated goals. As a result, both the board and management have lost credibility with the market.
Our thesis for this investment is predicated on our belief that the future will not look like the past, and that the company’s hotel properties will be sold in the near future allowing the value of the company’s assets to be realized for the benefit of shareholders. We believe the market has discounted the probability that this transaction will take place.
The purpose of this write up is to argue that the market perception of the stock is wrong. This will be accomplished firstly by establishing the value inherent in the company’s assets and then by determining the probability that such a transaction will take place. We believe that the downside has already been priced in by the market, and that the stock is worth between $1.00 and $10 per share (or a market capitalization of between 35m and 350m), which represents an asymmetric opportunity at current prices ~$1.50 or market capitalization of around ~40m.
Background
Morgans Hotel Group Co. was by Ian Schrager and Steve Rubell with the opening of the first ever boutique hotel, Morgans Hotel in 1984. The company has a long history of designing and managing modern, ultra-hip boutique hotels like the Royalton (renowned for its night club like lobby), Paramount and Delano, many of which were created in collaboration with Philippe Starck. These high profile properties have been credited with popularizing such concepts as ‘lobby socializing’ (in which the hotel lobby became a gathering place for guests), ‘cheap chic’ (which offered luxury in an affordable, stylish and sophisticated environment) and ‘urban resort’ (where the hotel’s amenities like spas and elaborate fitness centers make it a destination point amid the bustle of a city)2.
In 1998, NorthStar Capital, an investment fund run by ex-Apollo partner Edward Scheetz, paid $255m for 84% of the company.
The hospitality industry went through a slump following 9/11, and, as a property owner and developer, the company suffered from its highly levered balance sheet, a problem that would resurface in the future. In 2003, the Clift filed for bankruptcy. It reemerged from Chapter 11 in 2004, when the company sold the hotel in a sale/leaseback transaction. All of the company’s lenders and trade creditors were paid in full and the company received $71m in cash. However, it also saddled the company with a 99 year lease at an extremely high interest rate pegged to inflation, and also led to the departure of Mr. Schrager as CEO and Chairman in 2005 (Schrager said that the bankruptcy was ‘embarrassing’ for him because his ‘name was on the hotel’)3. In the meantime Schrager was able to renegotiate when the debt on his other properties came due, but the travails of the early ‘00s foreshadowed what was to come as the assets again became distressed during the 2008 credit crunch4. The company went public in 2006 following Schrager’s departure, offering shares for between $19-$22/share.
During the Financial Crisis, Yucapia, the private equity firm run by Ron Burkle, injected $75m into the company, in exchange for preferred shares and warrants to buy up to 12.5m shares of stock at $6 a share. The agreement also gave him the right to name a director to the board as well as veto power over transactions that involved the company or assets of the company. The preferred shares had a dividend rate starting at 8%, but it would rise to 10% in 2014 and 20% in 2016 if the shares were not redeemed. The CEO at the time called the investment ‘shareholder friendly’ that provided the company with a ‘great deal of flexibility to weather the remainder of the downturn5’, and Burkle’s compatriots filled the board. From 2009 to 2012, Morgans’ assets recovered but the company made numerous investments through the P&L line item and did a variety of other things that has kept the stock price depressed. Some thought that Yucaipa had no desire to make historical numbers look good, because they had been trying to increase their ownership stake of the company and/or its assets at lower valuations. The company also began their attempt to transform the company’s business model from one of property ownership and development to service-based hotel management.
In November 2012, and again in February 2013, Hyatt Hotels made an offer of $7.50 a share for Morgans. The company was trading at around $6 a share when the bid was made but the board rejected it as too low6. In the meantime, the company seemed to be making progress in its strategy, with then CEO Michael Gross managing to sign 9 new management contracts in FY 2012.
Frictions within the board became apparent when the company’s largest shareholder OTK Associates launched a proxy contest in the spring of 2013 despite the progress made by Gross. At the time, the incumbent board was aligned with Yucaipa. This would also be the start of a feud between the two groups that would last until now, and would have a material impact on the company’s operations. When it became apparent that Yucaipa would lose the contest, the company announced a recapitalization plan to maintain control of the company7. The proposed transaction would have exchanged Yucaipa’s 75,000 shares of preferred stock, warrants and $88m principal amount of company’s senior subordinated convertible notes for ownership of the Delano South Beach hotel and the company’s interest in the F&B management business TLG. The recap plan would also have given Yucaipa more shares (potentially owning as much as 30% of the company) in a rights offering that was backstopped by Yucaipa. OTK filed an injunction block the transaction, alleging that it undervalued the Delano property, and that it was a ‘coercively dilutive recapitalization’ that was ‘an obvious attempt to place a large block of stock in friendly hands prior to the annual meeting in order to preserve the positions of its incumbent directors’8. The injunction was granted, and OTK won a clean sweep over the incumbent board shortly after. There was another attempt to unseat the board in 2014, when Kerrisdale, a hedge fund allied with Yucaipa launched a proxy contest of their own. Kerrisdale claimed that the company was undervalued and called for the now OTK-controlled board to sell the company in order to realize this value. While Kerrisdale’s proxy contest failed, they did manage to place two of their candidates on the board.
On May 13, 2014, the company announced that it had retained Morgan Stanley as its financial advisor in exploring its ‘full range of strategic alternatives’9.
http://www.valuewalk.com/2016/03/morgans-hotel-group-co-mhgc-long-thesis/?all=1
Enterprising Investor
9 년 전
Morgans Hotel Group Reports Fourth Quarter and Full Year 2015 Results (3/10/16)
NEW YORK, March 10, 2016 (GLOBE NEWSWIRE) -- Morgans Hotel Group Co. (NASDAQ:MHGC) (the “Company” or “Morgans”) today reported financial results for the quarter and year ended December 31, 2015.
Fourth Quarter 2015 Highlights
• Adjusted EBITDA, excluding the Company’s ownership interests in The Light Group (“TLG”) and Mondrian SoHo, was $14.7 million in the fourth quarter of 2015 as compared to $15.3 million for the same period in 2014, a decrease of 4.3%.
• Revenue per available room (“RevPAR”) for System-Wide Comparable Hotels decreased 5.4% during the fourth quarter of 2015 as compared to the fourth quarter of 2014. System-Wide Comparable Hotels room revenues plus resort and facility fees decreased by 4.5% quarter over quarter.
Full Year Highlights
• Adjusted EBITDA, excluding the Company’s ownership interests in TLG and Mondrian SoHo, was $46.7 million for the year ended December 31, 2015, a $0.7 million or 1.6% increase as compared to same period in 2014.
• RevPAR for System-Wide Comparable Hotels decreased 4.1% for the year ended December 31, 2015 as compared to the same period in 2014. System-Wide Comparable Hotels’ room revenues plus resort and facility fees, implemented at certain hotels in the second half of 2014, decreased 1.5% during 2015 as compared to the same period in 2014.
Fourth Quarter 2015 Operating Results
Adjusted EBITDA, defined below, excluding the Company’s ownership interests in TLG and Mondrian SoHo, which the Company no longer held effective during the first quarter of 2015, was $14.7 million in the fourth quarter of 2015, compared to $15.3 million for the same period in 2014, a decrease of 4.3%. Adjusted EBITDA for the fourth quarter of 2014, including the ownership interests in TLG and Mondrian SoHo, was $17.7 million.
RevPAR at System-Wide Comparable Hotels decreased by 5.4% in the fourth quarter of 2015 as compared to the same period in 2014, due to a 4.5% decrease in average daily rate (“ADR”) and a 1.0% decrease in occupancy. System-Wide Comparable Hotels room revenues plus resort and facility fees, implemented at certain hotels in the second half of 2014, decreased by 4.5% quarter over quarter.
RevPAR from System-Wide Comparable Hotels in New York decreased 4.5% for the fourth quarter of 2015 as compared to the same period in 2014, due to a 5.0% decrease in ADR slightly offset by a 0.5% increase in occupancy. RevPAR at Hudson decreased 4.3% during the fourth quarter of 2015 as compared to the same period in 2014, driven by a 5.8% ADR decrease primarily due to new supply in New York City and a stronger U.S. dollar, which impacted international travel.
RevPAR from System-Wide Comparable Hotels in Miami decreased 10.8% in the fourth quarter of 2015 as compared to the fourth quarter of 2014. Delano South Beach experienced a RevPAR decrease of 8.8% during the fourth quarter of 2015 as compared to the same period in 2014, due to lower ADR, which was primarily the result of new supply in South Beach.
Clift’s RevPAR increased 3.0% in the fourth quarter of 2015 as compared to the fourth quarter of 2014 due to a 4.5% increase in ADR.
The Company’s managed hotels in London are non-comparable due to major renovations at Sanderson and St Martins Lane in 2014 and the first half of 2015, and the opening of Mondrian London on September 30, 2014. For the three months ended December 31, 2015, with renovations now complete, Sanderson and St Martins Lane generated RevPAR growth of 4.2% (in constant dollars) as compared to the same period in 2014.
Management fees decreased by $2.6 million in the fourth quarter of 2015 as compared to the same period in 2014 due to the sale of TLG in January 2015. On a comparable basis, management fees increased $0.2 million, or 4.6%.
Operating margins at the Company’s Owned Hotels and leased food and beverage operations increased by approximately 30 basis points quarter over quarter, despite the decline in revenues.
Corporate expenses, excluding stock compensation expenses, decreased by $0.6 million, or 12.0% in the fourth quarter of 2015 as compared to the same period in 2014 primarily due to the sale of TLG.
During the fourth quarter of 2015, the Company recorded a $50.6 million income tax benefit related to the release of a portion of the Company’s valuation allowance as a result of the plan to sell both the Hudson and Delano South Beach real estate assets.
The Company recorded net income of $49.1 million in the fourth quarter of 2015 compared to a net loss of $6.7 million in the fourth quarter of 2014, primarily as a result of the income tax benefit, discussed above.
Full Year Operating Results
For the full year 2015, Adjusted EBITDA, excluding the Company’s ownership of TLG and Mondrian SoHo, was $46.7 million, an increase of 1.6% from 2014, as revenue declines were offset by operational efficiencies in 2015.
RevPAR at System-Wide Comparable Hotels decreased by 4.1% in 2015 as compared to 2014, driven by a 3.5% decrease in ADR and a 0.6% decrease in occupancy. System-Wide Comparable Hotels’ room revenues plus resort and facility fees, implemented at certain hotels in the second half of 2014, decreased 1.5% during 2015 as compared to the same period in 2014.
Operating margins at the Company’s Owned Hotels and leased food and beverage operations were relatively flat year over year. Interest expense decreased $6.2 million, or 11.5% in 2015 as compared to 2014, due primarily to a lower outstanding debt balance throughout 2015.
The Company recorded net income of $22.1 million for the year ended December 31, 2015, compared to a net loss of $50.7 million for the year ended December 31, 2014 due primarily to the income tax benefit recorded in the fourth quarter of 2015, decreased interest expense, cost savings, and settlement income, discussed below.
Strategic Update
On November 4, 2015, the Company’s Board of Directors announced a plan to monetize its Hudson and Delano South Beach real estate assets and commence a search for a permanent chief executive officer. Monetizing these assets is expected to further focus the Company’s business on an asset-light, brand-centered model with lower leverage.
In connection with the plan to monetize the real estate assets, in December 2015, the Company retained a leading hotel brokerage firm, Hodges Ward Elliott LLC, to market the Hudson and Delano South Beach hotels. The marketing process is underway and a call for offers is expected by the end of the first quarter of 2016. The Company currently expects to complete the process during the second quarter of 2016.
Balance Sheet
The Company’s total consolidated debt at December 31, 2015 was $606.4 million, which includes $101.5 million of capital lease obligations primarily related to Clift. Outstanding Series A preferred securities and undeclared dividends totaled $130.6 million.
At December 31, 2015, the Company had approximately $45.9 million in cash and cash equivalents and $12.9 million in restricted cash.
In February 2016, the Company prepaid $28.2 million to reduce the principal balance on its mortgage debt secured by Hudson and Delano South Beach (the “Hudson/Delano Mortgage Loan”) by the same amount and extended the maturity of this debt until February 2017. The prepayment reduced the aggregate principal amount of indebtedness outstanding under the Hudson/Delano Mortgage Loan from $450.0 million to approximately $421.8 million, which provides the Company with lower leverage and expected annual interest expense savings of approximately $1.7 million.
During the fourth quarter of 2015, the Company received $10.0 million related to the settlement of outstanding litigation surrounding Mondrian SoHo.
As of December 31, 2015, the Company had approximately $433.0 million of remaining Federal tax net operating loss carryforwards to offset future income, enabling us to dispose of assets in a tax-efficient manner. As of December 31, 2015, the Company estimates that the tax basis of Delano South Beach is approximately $67.0 million and the tax basis in Hudson is approximately $142.0 million.
Development
The Company has signed management agreements for five hotels in various stages of development, including two hotels under construction consisting of Mondrian Doha, currently scheduled to open in late 2016 and Delano Dubai, currently scheduled to open in late 2017.
Investor Conference Call
The Company will also host a conference call to review the quarter’s results on Thursday, March 10, 2016 at 5:00 PM Eastern Time. The call will be webcast live over the Internet and will be accessible at www.morganshotelgroup.com under the Investors section. Participants should follow the instructions provided on the website for the download and installation of audio applications necessary to join the webcast.
The call will also be accessible live over the phone by dialing (877) 876-9176 (within U.S.) or (785) 424-1667 (outside U.S.) and providing the following passcode: 9798485. A playback of the conference call will be available beginning at 8:00 PM Eastern Time, Thursday, March 10, 2016, through Thursday, March 17, 2016. To access the playback, please dial (888) 203-1112 (within U.S.) or +1 (719) 457-0820 (outside U.S.) and enter passcode 9798485.
Additional Definitions
“Adjusted EBITDA” means adjusted earnings before interest, taxes, depreciation and amortization, as further defined below.
“EBITDA” means earnings before interest, income taxes, depreciation and amortization.
“Owned Hotels” means Hudson in New York, Delano South Beach in Miami Beach and Clift in San Francisco, which the Company leases under a long-term lease.
“System-Wide Comparable Hotels” means all Morgans Hotel Group branded hotels operated by the Company, except for hotels added or under major renovation during the current or the prior year period, development projects and hotels no longer managed by the Company. System-Wide Comparable Hotels for the periods ended December 31, 2015 and 2014 exclude Sanderson and St Martins Lane in London, which were both under major renovations in 2014 and the first half of 2015, Mondrian London, Delano Las Vegas and 10 Karaköy, all of which are newly opened hotels in 2014, and Mondrian SoHo, which the Company no longer managed effective April 27, 2015.
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ:MHGC) is widely credited as the creator of the first “boutique” hotel and a continuing leader of the hotel industry’s boutique sector. Morgans Hotel Group operates Delano in South Beach, Mondrian in Los Angeles, South Beach and London, Hudson in New York, Morgans and Royalton in New York, Clift in San Francisco, Shore Club in South Beach and Sanderson and St Martins Lane in London. Morgans Hotel Group has ownership interests in several of these hotels. Morgans Hotel Group also licenses its brand through Delano in Las Vegas and 10 Karaköy in Istanbul, Turkey. Morgans Hotel Group has other hotels in various stages of development to be operated under management or franchise agreements, including a Mondrian property in Doha, Qatar and a Delano in Dubai. For more information please visit www.morganshotelgroup.com.
http://globenewswire.com/news-release/2016/03/10/818905/0/en/Morgans-Hotel-Group-Reports-Fourth-Quarter-and-Full-Year-2015-Results.html?f=22&fvtc=7
Enterprising Investor
9 년 전
Morgans Hotel Group Provides Corporate Update (2/10/16)
NEW YORK, Feb. 10, 2016 /PRNewswire/ -- Morgans Hotel Group Co. (NASDAQ: MHGC) ("Morgans" or the "Company") today provided the following update:
Maturity Extension and Debt Prepayment
As previously disclosed by the Company on Form 8-K filed with the Securities and Exchange Commission on February 9, 2016, certain subsidiaries of the Company exercised their first option to extend the initial maturity date of the nonrecourse mortgage notes and the mezzanine loans outstanding under the Hudson/Delano 2014 Mortgage Loan by one year from February 9, 2016 to February 9, 2017 and prepaid approximately $28.2 million of outstanding indebtedness under the Hudson/Delano 2014 Mortgage Loan. The prepayment reduced the aggregate principal amount of indebtedness outstanding under the Hudson/Delano 2014 Mortgage Loan from $450.0 million to approximately $421.8 million, which provides the Company with lower leverage and expected annual cash flow savings of approximately $1.7 million. The prepayment was made with cash on hand. Following the prepayment, the Company believes that it has sufficient liquidity to meet its current working capital needs.
Strategic Process and CEO Search Updates
The Company is also providing updates on the Board of Director's previously announced process to monetize Hudson New York and Delano South Beach and search for a permanent Chief Executive Officer.
• On December 7, 2015, the Company announced that it had engaged Hodges Ward Elliot, a leading hotel brokerage firm, to commence a broker-marketed monetization of Hudson New York and Delano South Beach. The marketing process is underway with a number of prospective domestic and international parties and an expected call for offers by the end of the first quarter of 2016. The Company currently expects to complete the process during the second quarter of 2016.
• In addition, the search process for a new Chief Executive Officer remains a high priority of the Board of Directors. The Board has interviewed a number of highly qualified candidates with significant industry experience and has narrowed the search. The Board currently expects to finalize that process in the near term.
The Company expects to provide additional updates on its earnings call for the year ended December 31, 2015.
ABOUT MORGANS HOTEL GROUP
Morgans Hotel Group Co. is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates Delano in South Beach, Mondrian in Los Angeles, South Beach and London, Hudson in New York, Morgans and Royalton in New York, Clift in San Francisco, Shore Club in South Beach and Sanderson and St Martins Lane in London. Morgans Hotel Group has ownership interests or owns several of these hotels. Morgans Hotel Group also licenses its brand through Delano in Las Vegas and 10 Karaköy in Istanbul, Turkey. Morgans Hotel Group has other hotels in various stages of development to be operated under management or franchise agreements, including a Mondrian property in Doha, Qatar and a Delano in Dubai.
http://www.prnewswire.com/news-releases/morgans-hotel-group-provides-corporate-update-300218393.html
Enterprising Investor
9 년 전
Merger Talks Between Morgans Hotel Group and SBE End Without Deal (11/04/15)
Ronald Burkle favored the deal, but the firm of longtime rival Jason Kalisman opposed it
By Craig Karmin
Advanced merger discussions between Morgans Hotel Group Co. and hotelier Sam Nazarian’s SBE Entertainment Group have collapsed following months of negotiations, said people close to the process, after two longtime rivals at Morgans clashed over terms of the deal.
On one side was private-equity investor Ronald Burkle, a preferred-equity holder in Morgans, who favored the merger. On the other side: Jason Kalisman, a Morgans board member whose investment firm, OTK Associates, is the largest shareholder.
Mr. Burkle was in line to become chairman of the combined company and would have acquired two Morgans hotels as part of the deal, according to a draft news release on the merger reviewed by The Wall Street Journal.
Mr. Kalisman, however, believed the company was giving away too much to Mr. Burkle, according to an October letter that OTK sent to the Morgans board that was reviewed by the Journal.
The negotiations faltered after Mr. Kalisman’s firm wrote to the board to express its “strong opposition” to the transaction, according to the letter. Mr. Burkle said he wouldn’t agree to a deal without full board approval, these people said.
Some large Morgans shareholders, who were uneasy with an agreement giving board control to SBE, also had concerns about a merger, said people close to the matter.
The two men have sparred for years, sometimes lashing out publicly, as when Mr. Burkle referred to Mr. Kalisman as a “spoiled child” in a regulatory filing. The feud goes back to at least 2013, when they angled for control of Morgans, a historic but small boutique-hotel operator with a shrinking market capitalization that now stands at about $120 million. Morgans also has about $500 million in long-term debt, excluding a capital lease for a San Francisco hotel.
Both men trace their roots to the retail industry. Mr. Burkle, 62 years old, is the son of a grocery-store manager. He worked for his father as a clerk and went on to found the private-equity firm Yucaipa Cos. and became a billionaire through leveraged buyouts of supermarkets and grocery chains.
Mr. Kalisman, 37, has a background in real estate and investing and was Morgans’s interim chief executive until recently. He is related to the Taubman family that created an empire of shopping malls, starting in 1950.
A Morgans merger with SBE had been in the works for months and was seen as a second chance for both companies, which have been through tough times lately.
Founded by nightclub impresario Ian Schrager in 1984, Morgans helped pioneer the boutique-hotel craze that focuses on high design and social public spaces. It owns the Hudson New York and Delano South Beach hotels and manages about a dozen properties in the U.S. and abroad.
But as more hotel companies launched competing boutique properties, including the big chains, Morgans has had a difficult time keeping its edge.
The company in May 2014 announced it had hired Morgan Stanley to explore strategic alternatives. It has reported declining revenue in recent quarters even as the U.S. hotel industry has enjoyed booming revenue and record room rates.
The busted deal also upends SBE’s hope for a publicly traded stock, which people familiar with Mr. Nazarian’s thinking said is something he had counted on to help his company grow. SBE has new hotels in the pipeline, including one in New York and other properties in Mexico, but the company will have to find new funding for future expansion.
The two sides reached a tentative agreement that would have called for each to own half of the new company, which was going to be called SBE-Morgans, in a stock-for-stock transaction, according to the draft news release. SBE-Morgans’s market capitalization would have been about $260 million, a person familiar with the negotiations said.
The combined company would have paired SBE’s SLS and other hotel brands and its nightclubs and restaurants with Morgans’s hotel brands like Delano and Mondrian. Mr. Nazarian, SBE’s chief executive officer, would have been CEO of the combined company.
The merger called for Mr. Burkle to acquire the two hotels in a deal that valued the properties at $590 million, according to the release.
Mr. Burkle became involved in Morgans a few years ago through preferred shares as well as loans he made to the company that have been retired.
OTK Associates began assembling a stake in Morgans in 2008 and in 2013 nominated a new slate of directors aimed at blocking Mr. Burkle’s recapitalization plan.
That plan involved canceling some of his holdings in the company in exchange for ownership of the Delano and other Morgans assets. OTK criticized the plan as giving control of the company to Mr. Burkle, and OTK’s slate of directors won the shareholder vote that year.
After the vote, Morgans then-CEO, Michael Gross, a close associate of Mr. Burkle, resigned and Mr. Kalisman took over as interim CEO, a position he held until earlier this year.
Mr. Burkle fired back a couple of months after the 2013 vote through a letter he attached to a Morgans regulatory filing, in which he said Mr. Kalisman was “acting like a spoiled child” and “playing with the company as though it’s your new toy.” The Yucaipa chief then said he wanted to see Morgans put up for sale.
After the market closed Wednesday, Morgans said that the company plans to hire a broker to market the two hotels it owns, and that it is getting closer to hiring a permanent CEO. Morgans also said two board members had resigned and would be replaced by another representative of OTK, and one from Pine River Capital Management, another large Morgans shareholder.
http://www.wsj.com/articles/merger-talks-between-morgans-hotel-group-and-sbe-end-without-deal-1446663537?cb=logged0.4428030494948194
Penny Roger$
13 년 전
Morgans Hotel Group Co. is a fully integrated hospitality company that operates, owns, acquires, develops and redevelops boutique hotels primarily in gateway cities and select resort markets in the United States, Europe and in select international locations. At March 1, 2011, the Company owned or partially owned, and managed a portfolio of 12 luxury hotel properties in New York, Miami, Los Angeles, San Francisco, London and Boston. In addition, the Company managed two non-Morgans Hotel Group branded hotels in San Juan, Puerto Rico and Playa del Carmen, Mexico. The Company also has a number of hotel development projects, including projects to be developed by third-parties but managed by the Company upon completion, in various stages of advancement or pending financing, located in Cabo San Lucas, Mexico, on the Aegean Sea in Turkey, in the Highline area in New York City, in Doha, Qatar. In November 2011, it sold the Sanderson and St Martins Lane hotels to Capital Hill Hotels Limited.
http://www.google.com/finance?q=MHGC
Hot Features
프리미엄
브라질 증권 거래소, NASDAQ, NYSE, AMEX, LSE 등 주요 거래소에서의 다양한 실시간 주식 시세를 모니터링합니다.
ClayTrader
8 년 전
HaasCat
9 년 전
willlbone
9 년 전
