Morgans Hotel Group (MHGC) Clarifies Yucaipa Statements

May 17, 2013 9:49 AM EDT
Morgans Hotel Group Co. (Nasdaq: MHGC) provided clarification regarding statements made in a filing submitted by The Yucaipa Companies.

The reference in the Yucaipa filing was to a letter received in November 2012 from a large international hotel company proposing to acquire all of the Company's outstanding common stock for $7.50 per share in cash. The letter said the proposal was based on publicly available information and would be subject to confirmatory due diligence. The Company's Board of Directors discussed this proposal and concluded that the price was not sufficiently attractive to commence formal negotiations in light of the views expressed to the Company's special transaction committee by its independent financial advisor regarding the prospects for growth in its stock price over the next several years if the Company is successful in securing additional management contracts through implementation of its strategic plan. The Company's Board responded that it was not interested at the proposed price, but that it might entertain a proposal at a significantly higher price. A similar proposal was received by the Company from the same party at the same price in February 2013 and the Company's position on the proposal was unchanged.

The Company said that the foregoing information will be included in its 2013 proxy statement when it is filed with the SEC.

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