Morgans Hotel Group Gets Unsolicited $ 261 Million Bid From Yucaipa
The Yucaipa Companies, an investment firm controlled by billionaire Ron Burkle, made an unsolicited and conditional proposal to Morgans Hotel Group for $ 8 per share, or roughly $ 261 million.
Earlier this year Morgans had signed agreements with the Yucaipa Companies to cancel Yucaipa’s interests in the company’s convertible notes, preferred stock and stock warrants in exchange for its ownership interests in Delano South Beach and The Light Group, a Las Vegas nightclub operator that it acquired in 2011.
A proxy battle, in which OTK, Morgans’ largest shareholder, was the victor, killed the Yucaipa Companies’ proposal. Stockholders voted to elect the seven OTK Associates’ nominees to the board of directors, which was thought to end the contentious battle between the two companies. Morgans said the company’s board would “carefully review the proposal with its financial and legal advisors and will determine the appropriate response in due course.”