13 Reasons Why Morgans Hotel Group Was Desperately Seeking a Suitor
Skift Take
The lesson leaned from the latest SEC filings from Morgans? When your company's stock price dwindles and its future looks bleak, you need to put aside personal differences and seriously consider a potential buyer.
When it was announced in May that Sam Nazarian's privately owned SBE would finally succeed in its second attempt to buy the beleaguered Morgans Hotel Group, it wasn't all that surprising.
SBE had tried, unsuccessfully, in 2015 to buy the company once led by legendary boutique hoteliers Ian Schrager and Steve Rubell, but failed because of in-fighting among members of Morgans' board. SBE's interest in Morgans was a given, and with the 2015 deal, the two companies would have merged with a 50/50 equity split, with Nazarian as the new CEO of the combined public entity, but it wasn't meant to be.
What was surprising about the May 9 deal, however, was the price tag. Because Morgans' stock price had dropped so low, to just 79 cents a share in February, SBE came back for Morgans, and for a much lower price of $2.25 per share, or just around $82 million, instead of a 50/50 merger as proposed in
