Skift Take
The restructuring will transform Morgan from owner/operator of hotels into a brand and management company, something a lot of upscale brands are increasingly looking to do.
Morgans Hotel Group Co., the boutique-hotel operator under pressure from its largest shareholder, said Yucaipa Cos. will swap interests in the company’s convertible notes and preferred stock for its ownership in the Delano South Beach and the Light Group.
Morgans will continue to manage Delano South Beach in Miami Beach, Florida, as part of a long-term agreement, the company said today in a statement. Morgans also said it will start a $100 million rights offering available to shareholders, which Yucaipa, billionaire Ron Burkle’s investment firm, will backstop with no fees if the rights are not exercised in full.
Morgans, which put the Delano South Beach on the market last year, has been selling real estate and using the proceeds to expand its management operations. The deal with Yucaipa fo
