NEW YORK, April 23, 2014 /PRNewswire/ -- Morgans Hotel
Group Co. (NASDAQ: MHGC) ("Morgans" or the "Company"), the
New York-based hospitality
management company, announced that it has filed with the U.S.
Securities and Exchange Commission an investor presentation that it
will be using with stockholders in advance of its Annual Meeting to
be held on May 14, 2014. On
April 22, 2014, the Board of
Directors also voted to redeem the Company's Stockholder Protection
Rights Plan.
The presentation discusses in detail the significant progress
Morgans' Board has overseen in only ten months since stockholders
overwhelmingly voted for change to the Company's leadership.
The presentation also outlines why the slate put forth by
Kerrisdale Capital Management introduces unnecessary and
substantial risk to the Company's future by disrupting key value
creating initiatives currently underway.
Among other things, the presentation highlights the numerous
ways in which Morgans' Board has delivered on its promises,
including restructuring the Company's highly leveraged legacy
balance sheet, reducing a bloated cost structure, properly
executing on the Company's asset-light, brand focused strategy, and
improving accountability at the board level all while focusing on
the details of running the Company.
Jason T. Kalisman, Morgans'
Chairman of the Board, said, "As a result of the current Board's
efforts, Morgans Hotel Group is in a much stronger and more stable
position than it was a year ago, both financially and
operationally. Kerrisdale's single issue agenda, which is based
solely on selling the Company seemingly at any price, runs the
enormous risk of permanently impairing stockholder value.
Kerrisdale's most recent patchwork solution, upon realizing the
severe limitations of their slate, was to retain a direct
competitor and entity affiliated with the Yucaipa Companies. This
decision is a glaring indication of Kerrisdale's lack of interest
in representing all stockholders as they have knowingly, or
unwittingly, advocated for a group that has no interest in
maximizing value for all stockholders."
Kalisman added, "As fiduciaries, the current Board is constantly
exploring opportunities to do what is right in the short and
longer-term for stockholders, but only at the right time and the
right price. The improvements the Board is making, including the
recent decision to redeem the Rights Plan, will allow Morgans to
consider and pursue a broad range of business opportunities and
strategic alternatives from a position of strength and flexibility.
We urge all stockholders to vote the WHITE proxy card
today."
The full presentation is available at
http://www.ProtectValueatMorgans.com.
About Morgans Hotel Group
Morgans Hotel Group Co.
(NASDAQ: MHGC) is widely credited as the creator of the first
"boutique" hotel and a continuing leader of the hotel industry's
boutique sector. Morgans Hotel Group operates Delano in South Beach, Mondrian in
Los Angeles, New York and South Beach, Hudson in
New York, Morgans and Royalton in
New York, Clift in San Francisco, Shore Club in South Beach and
Sanderson and St Martins Lane in London. Morgans Hotel Group has ownership
interests or owns several of these hotels. Morgans Hotel Group has
other hotels in various stages of development to be operated under
management or franchise agreements. These include Delano properties in Las Vegas, Nevada and Moscow, Russia; Mondrian properties in Baha
Mar in Nassau, The Bahamas, London,
England, and Doha, Qatar;
and a Morgans Original in Istanbul,
Turkey. Morgans Hotel Group also owns a 90% controlling
interest in The Light Group, a leading lifestyle food and beverage
company. For more information please visit
www.morganshotelgroup.com.
Forward-Looking and Cautionary Statements
This press
release may contain certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements relate to, among other things, the
operating performance of our investments and financing needs.
Forward-looking statements are generally identifiable by use of
forward-looking terminology such as "may," "will," "should,"
"potential, " "intend," "expect," "endeavor," "seek," "anticipate,"
"estimate," "overestimate," "underestimate," "believe," "could,"
"project," "predict, " "continue" or other similar words or
expressions. These forward-looking statements reflect our current
views about future events and are subject to risks, uncertainties,
assumptions and changes in circumstances that may cause our actual
results to differ materially from those expressed in any
forward-looking statement. Important risks and factors that could
cause our actual results to differ materially from those expressed
in any forward-looking statements include, but are not limited to
economic, business, competitive market and regulatory conditions
such as: a sustained downturn in economic and market conditions,
both in the U.S. and internationally, particularly as it impacts
demand for travel, hotels, dining and entertainment; the Company's
levels of debt, its ability to refinance its current outstanding
debt, repay outstanding debt or make payments on guaranties as they
may become due, general volatility of the capital markets and the
Company's ability to access the capital markets and the ability of
our joint ventures to do the foregoing; the impact of financial and
other covenants in the Company's loan agreements and other debt
instruments that limit the Company's ability to borrow and restrict
its operations; the Company's history of losses; the Company's
ability to compete in the "boutique" or "lifestyle" hotel segments
of the hospitality industry and changes in the competitive
environment in the Company's industry and the markets where it
invests; the Company's ability to protect the value of its name,
image and brands and its intellectual property; risks related to
natural disasters, terrorist attacks, the threat of terrorist
attacks and similar disasters; risks related to the Company's
international operations, such as global economic conditions,
political or economic instability, compliance with foreign
regulations and satisfaction of international business and
workplace requirements; the Company's ability to timely fund the
renovations and capital improvements necessary to maintain its
properties at the quality of the Morgans Hotel Group and associated
brands; risks associated with the acquisition, development and
integration of properties and businesses; the risks of conducting
business through joint venture entities over which the Company may
not have full control; the Company's ability to perform under
management agreements and to resolve any disputes with owners of
properties that the Company manages but does not wholly own;
potential terminations of management agreements; the impact of any
material litigation, claims or disputes, including labor disputes;
the seasonal nature of the hospitality business and other aspects
of the hospitality industry that are beyond the Company's; and
other risk factors discussed in the Company's Annual Report on Form
10-K for the fiscal year ended December 31,
2013, which was filed with the Securities and Exchange
Commission (the "SEC") on March 13,
2014, and other documents filed by the Company with the SEC
from time to time. All forward-looking statements in this press
release are made as of the date hereof, based upon information
known to management as of the date hereof, and the Company assumes
no obligations to update or revise any of its forward-looking
statements even if experience or future changes show that indicated
results or events will not be realized.
IMPORTANT ADDITIONAL INFORMATION
On April 16, 2014, the Company
filed a definitive proxy statement and WHITE proxy card with the
SEC in connection with the solicitation of proxies for its 2014
Annual Meeting of Stockholders. Stockholders are strongly advised
to read the Company's 2014 proxy statement because it contains
important information. Stockholders may obtain a free copy of the
2014 proxy statement and other documents that the Company files
with the SEC from the SEC's website at www.sec.gov or the Company's
website at www.morganshotelgroup.com.
Contacts:
Investors:
Rich Szymanski
Morgans Hotel Group
T. 212.277.4188
E. richard.szymanski@mhgc.com
Or
Bruce Goldfarb/ Chuck Garske/ Lisa
Patel
Okapi Partners
T. 212.297.0720
E. info@okapipartners.com
Media:
Dan Gagnier/Nathaniel Garnick
Sard Verbinnen & Co
T. 212.687.8080
SOURCE Morgans Hotel Group Co.