Morgans Hotel board gains upper hand ahead of proxy vote
By Bijoy Anandoth Koyitty
(Reuters) - A proxy battle for control of Morgans Hotel Group Co's MHGC.O board will be decided on Friday but the momentum seems to have swung in favor of the incumbent board after it said it would explore a sale of the company if re-elected.
OTK Associates, the hotel operator's largest shareholder with a 13.9 percent stake, has put up a seven-member director slate that it said would seek to return Morgans to profitability.
One investor, who was 'leaning towards' OTK, said he would now support the Morgans management in the vote due June 14.
"I would expect other shareholders also supporting the management, given the recent developments - a clear statement the management has made in terms of selling the company," said Sahm Adrangi, founder of Kerrisdale Capital Management.
The New York-based hedge fund holds more than a 1 percent stake in Morgans Hotel.
Morgans, known for boutique hotel brands including the Hudson and Royalton in New York, Delano in South Beach Miami and Mondrian in Los Angeles, said last week it was exploring a sale given shareholder feedback and expressions of interest it has received from potential buyers.
The company then said it had been contacted by five strategic buyers, which has since risen to nine.
Morgans said last month it had rejected two takeover bids from a large international hotel company since November. Morgans said the suitor, which it did not name, had offered $7.50 per share in cash. Continued...