From the New York website: A mystery rival suitor is threatening to derail Ron Burkle’s $800 million bid to buy Morgans Hotel Group — and the investor isn’t happy about it.
The struggling hotel company announced the revised offer from an unnamed bidder on Wednesday, and promptly delayed a shareholder vote on Burkle’s bid until Sept. 26.
In a letter to its board, the company said the rival bidder’s “purported financing source indicated it would provide up to $500 million in capital to support that transaction, but very little information about this financing has been provided.”
Burkle, the co-founder of private equity firm Yucaipa Companies, bid $2.25 per share for the hotel company – or around $800 million. The rival bidder offered $2.75 per share.
In May, Sam Nazarian’s SBE Entertainment Group reached a deal to buy Morgans for $2.25 per share, but one shareholder subsequently sued to block it. According to the Post, SBE is Burkle’s partner in his bid for the company, which includes the Hudson hotel in Columbus Circle.
Morgans had $575 million in debt and just $11 million in cash at the end of June, the Post reported. In its May issue, The Real Deal went behind the scenes to trace the origins of the company’s woes. [NYP] — Konrad Putzier