What was a merger between Morgans Hotel Group and SBE Entertainment seems to have collapsed!
After months of negotiation the merger has ended without any deal made. In October, the two had reached an agreement that would have called for each half of the new company, which was planned to be called SBE-Morgans, in a stock-for-stock transaction. SBE-Morgans was planned to manage 19 hotels across cities such as New York, Los Angeles, Miami, and London, including brands like Delano, Mondrian, and SLS. This merger would have had a market capitalization of $260 million.
According to the Wall Street Journal, the merger fell apart due to differences of opinion between Jason Kalisman, manager of Morgan’s larger shareholder and a member of the Morgans board, and Ron Burkle, the Beverly Hills-based owner of Yucaipa Companies. The report continues to state that the lynchpin of the conflicts was due to Jason Kalisman believing that Ron Burkle was receiving too much in the proposed deal. This conflict of interest didn’t occur until the very end of the process and shows no signs of any future deals with each other.
A few of the large Morgans shareholders were also concerned about the merger because it would have given board control to SBE. With the merger collapsed, Morgan shareholders no longer have to worry about their share of the company.
While that does leave one West Hollywood real estate rumor to rest, there are still many others floating around about the several other Boystown properties that WEHOville has yet to answer. For example, is Will Pat Rogers selling his Here Lounge to owner of The Abbey, David Cooley? Or is it true that Lisa Vanderpump, who owns P.U.M.P interested in acquiring Cooleys?
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