Morgans Hotel Group is mulling over a new potential buyer for its last two hotels, the Hudson in New York City and the Delano in Miami Beach. According to the Wall Street Journal, New York-based (Real Estate Investment Trust) REIT Rambleside Holdings reached out to Morgans with an offer of $507 million for its last two properties.
In a letter to Morgans Sunday, Rambleside also said it was prepared to buy the entire company, but did not detail the offer. This deal would transfer the management operations of a dozen hotels being run by Morgans, and the company also owns the Mondrian and Delano brands. Currently, Rambleside owns 4 percent of Morgans' stock.
Howard Lorber, chairman of the Morgans board, declined to comment on the letter, but told the Wall Street Journal: "We have a process, and we’re looking to do the best thing for shareholders."
The company has been searching for buyers after two years of financial losses, but recently was in talks with Sam Nazarian’s SBE Entertainment Group to create a company managing 19 hotels in Los Angeles, New York, Miami and London. Nazarian was expected to take over as CEO of this new company, but terms of the deal were never revealed.
With the introduction of Rambleside to the equation, Morgans has more options for a potential buyer. This could be good news for Morgans, who's only choice for the past several months was SBE, which last year gave up control of the SLS Las Vegas as a result of actions taken in owner Nazarian's private life, though eight more SLS hotels are slated to open in 2016.
Recently, SBE acquired the Foreman & Clark Building in Los Angeles with plans to turn it into a 13-story boutique hotel. Eater reported that SBE is planning on naming it the Hyde Hotel after the Hyde club in Los Angeles, though no timeline yet exists for the opening.