Morgans Hotel Group

Morgans Hotel Group (NASDAQ: $MHG) was a global, publicly-traded hospitality company founded by Ian Schrager and specialized in the boutique hotel category.[1][2][3] Its foundations were laid in 1984 with the opening of the namesake Morgans Hotel in New York City. MHG was listed on the NASDAQ exchange for over a decade.

Morgans Hotel Group
TypePrivate 1984-2006
Publicly traded (NASDAQ: $MHG) February 14, 2006-November 30, 2016
Private 2016-2017
IndustryHospitality, real estate development, investments
Founded1984 (1984)
Defunct2017 (2017)
Headquarters475 Tenth Avenue
New York City, NY, U.S.
Area served
Worldwide
(Doha, London, Istanbul, Los Angeles, Las Vegas, Miami, New York City, San Francisco)
Key people
Ian Schrager
Chairman, Founder, and CEO (1984-2005)
Jason Kalisman
Chairman & Interim Acting CEO (2013-2015), representing grandfather Alfred Taubman's interests
Lance Armstrong
Board Member (2006)
Sam Nazarian
CEO (2016-2017)
BrandsMorgans Hotel
Royalton Hotel
Paramount Hotel
Delano South Beach
Mondrian Hotel
Hudson Hotel
Clift Hotel
Sanderson Hotel
OwnerIan Schrager (1984-2006)
Alfred Taubman family (13%, until 2016)
Ron Burkle (2009-2017)
SBE Entertainment Group/Todd Boehly (2016-2017)
Number of employees
2000 (2006 IPO)
Websitemorganshotelgroup.com (defunct)

History

Morgans Hotel: World's first boutique hotel

In 1984, Studio 54 co-founders and business partners Ian Schrager and Steve Rubell opened their first hotel, Morgans Hotel, named after J. P. Morgan's Morgan Library & Museum next-door. Designed by Andrée Putman, the instant hit introduced the boutique hotel category, becoming a "worldwide phenomenon."[1][2][3] It is characterized by its triple-arched entrances that remain today.

Royalton Hotel & Paramount Hotel: Lobby socializing

Following the success of Morgans Hotel, they opened the well-received Royalton Hotel and Paramount Hotel, both designed by Philippe Starck. With these properties, Schrager introduced "lobby socializing" where the hotel lobby became a new kind of gathering place for hotel guests and New York City residents alike, and "cheap chic" was affordable luxury offered in a stylish, sophisticated environment.[4]

Delano Hotel & Mondrian Hotel: Urban resort

Schrager is also credited with inventing the "urban resort" with his Delano Hotel in Miami and Mondrian Hotel in West Hollywood, also designed by Starck.

Hudson Hotel et. al: Hotel as lifestyle

These were followed by the Hudson Hotel in New York, where he fully realized his concept "hotel as lifestyle", which he continued to refine, expanding to cities such as San Francisco with the Clift Hotel and London with the St. Martins Lane Hotel and the Sanderson Hotel, all designed by the prolific Starck.

NASDAQ: $MHG IPO

In June 2005, Schrager sold most of his stake in Morgans Hotel Group to launch the Ian Schrager Company. Despite stepping down as Chair and CEO, he retained $4 million in consultant pay and perks through end of 2007.[5][6]

On Valentine's Day 2006, $MHG IPO'ed in a $360 million-target raise underwritten by Morgan Stanley, with Schrager cashing in his remaining 450,000 shares for another $9 million.[5] Lance Armstrong served as a Board Member at IPO. Morgans Hotel Group was a publicly traded company on NASDAQ for over a decade.

2013-2014: Ron Burkle vs. Alfred Taubman

2014 saw the end of a legal proxy war for MHG control between two billionaire interests:

  • Yucaipa, the private equity firm of Ronald Burkle, who loaned MHG $75 million during the recession in 2009,
  • vs. MHG Chairman and Interim Acting CEO, Jason Taubman Kalisman, representing 13% majority interest of an investment vehicle for his grandfather, Alfred Taubman, owner of Sotheby's and Short Hills Mall, among other real estate interests.[7]

The two parties agreed to jointly seek a buyer, after all lingering legal proceedings with Burkle were settled.[8] However, it had no permanent CEO to lead the company until 2016.[9]

2016-2017: Sam Nazarian's SBE Entertainment Group M&A

After years-long battle and board-rejected offers to buy MHG, Burkle partnered with Sam Nazarian's SBE Entertainment Group, who agreed to acquire MHG for $805 million, in a take-private transaction completed November 30, 2016.[10]

Burkle converted his existing Morgans equity stake into a SBE ownership stake with a board seat. SBE also received investment from Cain International, a global real estate investment company headed by Todd Boehly and Jonathan Goldstein.[11] Nazarian retained majority ownership of SBE, remaining its Founder & CEO, leading day-to-day operations.

The merged company owned and/or operated over 20 hotels, including six properties under SBE's flagship SLS brand.[12]

Since 2020: Accor

In November 2020, all of SBE Entertainment Group's hotel holdings were sold to Accor, after the latter already acquired a 50% stake in 2018. The majority of former MHG hotels is now being operated by Accor's lifestyle subsidiary Ennismore. A few of the former hotels however, including the Morgans Hotel itself, are now closed.

Portfolio

As an independent company before M&A, MHG owned and managed 17 hotels in Doha, Istanbul, London, Los Angeles, Las Vegas, Miami Beach, New York and San Francisco comprising over 3,000 rooms. Each of its hotels was designed by a world−renowned designer:

New York

South Beach

Los Angeles

Las Vegas

San Francisco

London

Doha
  • Mondrian Doha

Istanbul
  • 10 Karakoy A Morgans Original - designed by Sinan Kafadar

References
  1. New York Media, LLC (22 July 1985). "New York Magazine". Newyorkmetro.com. New York Media, LLC: 28–39. ISSN 0028-7369. Retrieved 25 April 2013.
  2. "Tracing The Boutique Artists Design Hotel". Circa Design.
  3. "Morgans Hotel: World's first boutique hotel by Ian Schrager awaits reopening as luxury micro-apartments".
  4. Stodghill, Ron (19 August 2007). "A Hotelier Is Breaking the Mold Once Again". The New York Times. Retrieved 25 April 2013.
  5. "Morgans serves cash to Schrager".
  6. "Ian Schrager Checks Out, Cashes in with Morgans Hotel Group -- New York Magazine - Nymag".
  7. Samtani, Hiten (2013-10-08). "Ron Burkle Morgans Hotel Group | Hudson Hotel NYC". The Real Deal. Retrieved 2023-04-17.
  8. Strickland, Julie (2014-03-04). "Jason Taubman Kalisman | Ron Burkle | Morgans Hotel Group". The Real Deal. Retrieved 2023-04-17.
  9. "13 Reasons Why Morgans Hotel Group Was Desperately Seeking a Suitor". 23 June 2016.
  10. "Ron Burkle finally acquires Morgans Hotel Group". December 2016.
  11. "SBE Entertainment Concludes Morgans Hotel Acquisition". The Wall Street Journal. December 1, 2016. Retrieved January 29, 2017.
  12. "SBE Entertainment to Acquire Morgans Hotel Group". The Wall Street Journal. May 9, 2016. Retrieved January 29, 2017.
  13. "Morgans Hotel Group". Morgans Hotel Group. Retrieved 25 December 2018.
  14. "The Hotel to be rebranded as Delano Las Vegas". Las Vegas Review-Journal. August 6, 2012. Retrieved 2012-08-07.
  15. "The Delano Las Vegas". MGM Resorts International. Retrieved 12 September 2014.
  16. "Mondrian London At Sea Containers". Morgans Group LLC. Retrieved 12 September 2014.
  17. "Tom Dixon to turn Sea Containers House into Mondrian Hotel". Design Week. Retrieved 3 January 2014.
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