Morgans owners fight reservations over sale
There is no rest for Morgans Hotel Group.
Less than three months after irate shareholders ꦆousted the board, the bou🤡tique hotel operator behind the trendy Hudson Hotel is bracing for another revolt.
This time, shareholders are aiming their wrath at Morgan’s new chairman and interim CEO, Jason Kalisman, who lꦐed the June revolt that overthrew the previous board, including billionaire investor Ron Burkle.
On Thursday, hedge fund manager Sahm Adrangi of Kerrisdale Capital Management, which holds a 4 percent stake in Morgans, said he intends to nominate a new slate o♈f directors for 2014.
New York-based K🌼errisdale claims that Kalisman and the board “do not adequately represent the interests of the majority of shareholders,” according to a letter to shareholders that was filed yesterday with the Securities and Exchange Cꦅommission.
The overriding concern is that the new board isn’t interested in pursuing a sale of the publicཧly traded hotel chain, which also runs the Mondrian in Los Angeles and the Delano in Miami’s South Beach.
Before the board was booted over a controversial deal to trade prized assets like the Delano Hotel to Burkle, then-CEO Michael Gross s🔴aid Morgans had received up to nine “expressions of interest” from strategic buyers.
Kerrisdale said that “the overwhelming consensus view … is that Morgans shouldꦇ initi﷽ate an immediate public sale process.”
To show that it’s not alone, Kerrisdale said fellow shareholders Caerus Global🔯 Investors, which owns 553,101 shares, and Burkle’s Yucaipa Cos., which holds Morgans debt as well as millions in preferred stock and warrants, also support a sale.
Earlier this week, Burkle sent a heated letter to Kalisman urging him to “get Morgans♛ on the market and sell it to an appropriate buyer.”
The letter got personal with Burkle calling the 34-year-old Morgans CEO a “spoiled child” and telling him to “stop playing with the company as thoug💯h it’s your new toy.”
After telling Kalisman to “sell now for all stockholders benefit,” Burkle took this shot: “Ask your mother to buy you somethi𒀰ng else” — a reference to Kalisman’s prominent family, which founded luxury mall owner Taubman Centers Inc.
Burkle lashed 🃏out at Kalisman for not keeping both Yucaipa and the board in the loopꦏ, citing the recent resignation of Gross as CEO.
Burkle said the board found out about Gross’ departure only a few hours before Morgans was required to make the departure public through an SEC filing. In his letter, Burkle said Gross resigned weeks earlier after the company failed to offer him a board seat under the terms of his employmℱent contract.
Burkle also took issue with the new board’s decision to pay 4 interest on roughly $100 million of preferred stock owned by Yucaipa as a penalty for not putting a Yucaipa representative on the boar♚d. Burkle said the penalty amounts to more than $10,0ꩲ00 a day, or $4 million a year.
A spokesman for Kalisman, whose OTK Asso𓆉ciates owns a 14 percent stake in Morgans, declined to comment.
Shares of Morgans🐼 closed flat at $7.04. The stock is up 27 percent this year, buoyed by sale speculation and hopes that the new board would boost performance.