An unnamed bidder has upped the ante for Morgans Hotel Group by offering US$2.75 per share for the struggling New York-based hotel company, outbidding SBE Entertainment Group’s US$2.25 per share offer.
The SBE offer, worth about US$800 million and reportedly backed by grocery magnate Ron Burkle, the co-founder of private equity firm Yucaipa Companies, was set for a September 26 shareholder vote but has now been delayed so Morgans can evaluate the new takeover proposal.
Morgans has told its board that the rival bidder’s “purported financing source indicated it would provide up to US$500 million in capital to support that transaction, but very little information about this financing has been provided.”