Sam Nazarian’s SBE to acquire Morgans Hotel Group

Miami /
May.May 09, 2016 06:30 PM

From the New York website: Six months after merger talks collapsed between Sam Nazarian’s SBE Entertainment Group and beleaguered hotel manager Morgans Hotel Group, the two sides have agreed to a deal that will see SBE acquire Morgans for $2.25 per share.

The deal values Morgans at roughly $82 million in equity value and will create a hotel management company with a total enterprise value of around $800 million, the Wall Street Journal reported.

Nazarian, founder and CEO of Los Angeles-based SBE, will serve as chief executive and retain majority control of the combined company. Private equity investor Ron Burkle, who holds a $75 million preferred equity stake in Morgans, will obtain a 25 percent common equity interest in SBE.

SBE will acquire all of Morgans’ hotel management brands – including the Mondrian and the Delano brands – as well as ownership of the Hudson New York in Midtown and the Delano South Beach, the two remaining hotel assets that Morgans still owned. Combined, the new firm will own or operate 20 hotels globally.

“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,” Howard Lorber, chair of Morgans, said in a statement.

Merger talks between SBE and Morgans collapsed in November after Burkle and former Morgans CEO Jason Kalisman – whose OTK Associates is Morgans’ largest shareholder – disagreed over terms of the deal.

But with an agreement now reached with SBE, Morgans – which was founded by developer and Studio 54 impresario Ian Schrager, and is often credited with innovating the “boutique” hotel sector – may well receive fresh impetus after struggling in recent years.

The company’s share price fell over the past year, hitting a low of $0.79 per share in February, while shareholder infighting – particularly between Burkle and Kalisman – spilled over into the public realm.

Morgans shares jumped significantly in wake of news of the deal, and closed trading Monday up 10 percent at $2.10 per share. [WSJ]Rey Mashayekhi


Related Articles

arrow_forward_ios
Opterra Capital buys Holiday Inn & Suites Boca Raton for $13M
Opterra Capital buys Holiday Inn & Suites Boca Raton for $13M
Opterra Capital buys Holiday Inn & Suites Boca Raton for $13M
Rendering of the proposed Bulgari Hotel (Bulgari)
Setai Miami Beach owners and condo association sue city over Bulgari hotel height increase
Setai Miami Beach owners and condo association sue city over Bulgari hotel height increase
Louis Puig and 333 Jefferson Avenue in South-of-Fifth (Google Maps)
Former Club Space owner buys South Beach apartments for short-term rentals
Former Club Space owner buys South Beach apartments for short-term rentals
Nadim Ashi of Fort Partners with the hotel (Four Seasons, Fort)
Fort Partners buys Four Seasons Brickell hotel for $130M
Fort Partners buys Four Seasons Brickell hotel for $130M
Steven Witkoff and 700 North Miami Avenue (Google Maps)
Witkoff, Monroe pay $94M for site of canceled Marriott hotel at Miami Worldcenter
Witkoff, Monroe pay $94M for site of canceled Marriott hotel at Miami Worldcenter
Pebblebrook Hotel Trust President and CEO Jon Bortz with Margaritaville Hollywood Beach Resort (Margaritaville, Pebblebrook)
Pebblebrook buying Margaritaville Hollywood Beach for $270M
Pebblebrook buying Margaritaville Hollywood Beach for $270M
Clockwise from lower left: John Cooper and Allen Morris from The Allen Morris Company and Stormont Hospitality and Camilo Lopez and Jorge Escobar from Black Salmon (Ander & Co)
AMS Hospitality, Black Salmon buy Circa 39 hotel in Miami Beach
AMS Hospitality, Black Salmon buy Circa 39 hotel in Miami Beach
TPG CEO Jon Winkelried with AC Hotel Miami Midtown at 3400 Biscayne Boulevard and the next-door Hampton Inn & Suites at 3450 Biscayne Boulevard (Hilton, Google Maps)
Why buy one when you can take two? TPG nabs Miami AC Marriott, Hampton Inn in Edgewater for $61M
Why buy one when you can take two? TPG nabs Miami AC Marriott, Hampton Inn in Edgewater for $61M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...