Morgans Hotel shareholder Rambleside slams potential deal

Investment firm CEO pens critical letter to Morgans' board of directors

Aug.August 17, 2015 12:00 PM

An activist investor in Morgans Hotel Group threw a rhetorical grenade at the company, lambasting its potential merger and suggesting the company and its holdings should be sold lock, stock and barrel.

Gregory Cohen, CEO of Rambleside Holdings, one of the largest shareholders in the Morgans Hotel Group, addressed the group’s board in hopes of pre-empting an unnamed deal.

Morgans has been in merger talks with Sam Nazarian’s SBE Entertainment Group, a major hotel owner in Los Angeles, according to multiple outlets.

“We are deeply concerned that the potential transaction would substantially undervalue the Company and any breakup fee or other limitation on the Company’s ability to pursue strategic alternatives will further risk shareholder value,” wrote Cohen, addressing the board and its chairman, Howard Lorber.

The letter suggests an alternative course, “a widely marketed sale process and/or merging the management company with a world class hotel and brand manager,” but doesn’t offer specifics about alternative buyers or merger partners.

Cohen wrote that Rambleside would gladly participate in an alternate detail, and expressed regret that the company, according to Cohen, hadn’t been included to this point.

Morgans, which owns luxury hotel brands like the Delano, the Mondrian Soho and Hudson Hotel, has been seeking a buyer or merger partner for years. In May, the company’s interem CEO Jason Kalisman resigned his post. CFO Richard Szymanski took on his duties.

Rambleside’s Cohen has played the role of the activist investor before, composing a similar letter to New York REIT in June.

Related Articles

SBE's Sam Nazarian and leading architect Kobi Karp

“It is catastrophic:” Sam Nazarian, Kobi Karp talk coronavirus toll

Douglas Elliman's Howard Lorber and Amazon's Jeff Bezos (Credit: Getty Images)

Second-home tax would be “multiples worse” than Amazon loss: Howard Lorber

TRD Talks Live: hear from NYC’s biggest brokerage heads

TRD Talks Live: hear from NYC’s biggest brokerage heads

Howard Lorber (Credit: Getty Images)

Douglas Elliman reports flat sales in 2019, blaming soft NYC market

Howard Lorber and Barry Zubrow with unit 1601 at The Bristol (Credit: Getty Images)

Howard Lorber flips condo to investment banker Barry Zubrow

From left: Douglas Durst, 125 Greenwich, New Valley CEO Howard Lorber, Bizzi & Partners' Davide Bizzi (Credit: Getty Images, Google Maps)

Owners of $800M skyscraper skipped on $700K rent for sales gallery

Sam Nazarian and Manhattan West

Hospitality mogul Sam Nazarian taking a bite out of Manhattan West

Howard Lorber and a rendering of the Bristol

Howard Lorber picks up unit at the Bristol in West Palm Beach