UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the
Registrant
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Filed by
a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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MORGANS HOTEL
GROUP CO.
(NAME OF THE REGISTRANT AS SPECIFIED IN ITS CHARTER)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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x
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Neither the SEC nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits
or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.
Morgans Hotel Group Co. (which we refer to as Morgans, the Company, we, our or us) filed a preliminary proxy
statement with the Securities and Exchange Commission (
SEC
) on July 18, 2016 (the
preliminary proxy statement
), in connection with the special meeting of the Companys stockholders to be held in
connection with the proposed merger between the Company and an affiliate of SBEEG Holdings, LLC (which we refer to as SBE).
The
following information amends and supplements information in the preliminary proxy statement.
SPECIAL FACTORS - BACKGROUND OF THE
MERGER
The following language is hereby added as a new paragraph at the end of this section captioned Special Factors Background of
the Merger:
On July 18, 2016, the Company received an unsolicited written proposal from a party we refer to as Bidder V. The
proposal proposed an acquisition of the Companys common stock at an all cash purchase price of $2.75 per share, and stated that Bidder V anticipated redeeming the Companys Series A preferred securities at their liquidation value plus
accrued distributions and was committed to work to assume or refinance the Companys mortgage debt. Bidder V stated that it intended to finance the acquisition entirely with equity, and enclosed a non-binding letter of intent from a financial
institution expressing an agreement in principle to provide up to $250 million in equity financing to support Bidder Vs proposed transaction.
On
July 19, 2016, the Board (excluding Bradford Nugent and Howard Lorber, who recused themselves) met to consider the proposal from Bidder V. After consulting with its legal and financial advisors, the Board determined that the Bidder V proposal
would reasonably be expected to lead to a Superior Monroe Proposal within the meaning of the merger agreement, and that, consistent with its fiduciary duties, it should engage in discussions with Bidder V, subject to and in compliance
with the requirements of the merger agreement. Later that day, Fried Frank furnished a form of non-disclosure agreement conforming to the requirements of the merger agreement to counsel to Bidder V. Fried Frank and counsel to Bidder V are in the
process of finalizing a non-disclosure agreement.
Also on July 19, 2016, Bidder U requested a waiver from the Company of certain restrictions under
its non-disclosure agreement for the purpose of engaging in discussions with the Board, Yucaipa and OTK Associates with respect to Bidder Us proposal. On July 21, 2016, the Board (excluding Bradford Nugent and Howard Lorber, who recused
themselves) met to consider the request from Bidder U. After consulting with its legal and financial advisors, the Board determined in accordance with the provisions of the merger agreement to grant Bidder U the requested waivers. Each of Yucaipa
and OTK Associates is subject to agreements with SBE that limit the ability of such parties to engage in discussions with third parties, and the granting of waivers by the Board under the non-disclosure agreement with Bidder U is not intended to,
and does not, affect the obligations of Yucaipa and OTK Associates under their agreements with SBE.
Forward-Looking and Cautionary Statements
This document and the documents to which the Company refers in this report, contain not only historical information, but also forward-looking
statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Companys expectations or beliefs concerning future events, including the timing of
the transaction and other information relating to the transaction. Forward-looking statements include information concerning possible or assumed future results of operations of the Company, the expected completion and timing of the transaction and
other information relating to the transaction. Without limiting the foregoing, the words believes, anticipates, plans, expects, intends, forecasts, should,
estimates, contemplate, future, goal, potential, predict, project, projection, may, will, could, should,
would, assuming and similar expressions are intended to identify forward-looking statements. You should read statements that contain these words carefully. They discuss the Companys future expectations or state other
forward-looking information and may involve known and unknown risks over which the Company has no control. Those risks include, (i) the risk that the transaction may not be completed in a timely manner or at all, including by reason of the
unavailability of financing, which may adversely affect the Companys business and the price of the common stock of the Company, (ii) the failure to satisfy any of the conditions to the consummation of the transaction, including the
adoption of the acquisition agreement by the stockholders of the Company, the assumption or refinancing of the Companys mortgage loan agreements and the receipt of governmental and regulatory approvals, (iii) the occurrence of any event,
change or other circumstance that could give rise to the termination of the acquisition agreement, (iv) the effect of the announcement or pendency of the transaction on the Companys business relationships, operating results and business
generally, (v) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the transaction, (vi) risks related to diverting managements attention from
the Companys ongoing business operations and (vii) the outcome of any legal proceedings that may be instituted against us related to the
acquisition agreement or the transaction. Factors that may affect the business or financial results of the Company are described in the risk factors included in the Companys filings with
the SEC, including the Companys 2015 Annual Report on Form 10-K and later filed quarterly reports on Form 10-Q and Current Reports on Form 8-K, which factors are incorporated herein by reference. Forward-looking statements speak only as of the
date of this communication or the date of any document incorporated by reference in this document. Except as required by applicable law or regulation, the Company does not undertake to update these forward-looking statements to reflect future events
or circumstances.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the proposed acquisition of the Company by a new holding company to be established
SBEEG Holdings, LLC. In connection with the proposed transaction, the Company has filed a preliminary proxy statement, and the Company expects to file a definitive proxy statement and file or furnish other relevant materials with or to the
Securities and Exchange Commission. STOCKHOLDERS ARE URGED TO READ ALL RELEVANT MATERIALS FILED WITH OR FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE PRELIMINARY PROXY STATEMENT AND THE DEFINITIVE PROXY STATEMENT WHEN IT BECOMES
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Stockholders may obtain a free copy of the preliminary proxy statement and other documents filed with or furnished to the Securities and Exchange Commission
by the Company at the Securities and Exchange Commissions website at www.sec.gov. The Company will make available a copy of its public reports, without charge, upon written request to the General Counsel, Morgans Hotel Group Co., 475 Tenth
Avenue, 11th Floor, New York, NY 10018.
Participants in Solicitation
The Company and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of
proxies from its stockholders in connection with the proposed transaction. Information concerning the interests of the Companys participants in the solicitation is set forth in the Companys preliminary proxy statement, previously filed
with the Securities and Exchange Commission.
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