Morgans Hotel refinancing has Burkle fuming: report

February 11, 2014 09:01AM

The Ian Schrager-founded Morgans Hotel Group borrowed $450 million against two of its properties in a deal that will help pay off the majority of the $220 million debt held by billionaire shareholder Ron Burkle. The refinancing is seen as a rebuff of Burkle, who has been pushing for Chairman Jason Taubman Kalisman to hand off the company.

Citigroup values the Hudson Hotel at 356 West 58th Street and the Delano in South Beach at roughly $620 million. After the debt deal, Kalisman might look to sell either of those properties, the New York Post reported, citing an undisclosed source.

Another source said Burkle is “pissed off” over news of the deal.

Burkle bid $8 a share — roughly $870 million — on the company in November, but Kalisman rejected the offer, as previously reported.

“The [refinancing] puts them in a position to sell one or two hotels or the whole company,” Chris Agnew, an analyst for financial management firm MKM Partners, told the Post. [NYP]Mark Maurer