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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2016
Morgans Hotel Group Co.
(Exact name of registrant as specified in its charter)
Delaware
001-33738
16-1736884
(State or other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
475 Tenth Avenue
New York, NY
10018
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code: (212) 277-4100
Not applicable
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01.
Entry into Material Definitive Agreement
On May 9, 2016, Morgans Hotel Group Co. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with SBEEG Holdings, LLC, a Delaware limited liability company (“SBE”), and Trousdale Acquisition Sub, Inc., a
Delaware corporation and wholly owned subsidiary of SBE (“Merger Sub”).
On November 8, 2016, the parties entered into Amendment No. 1 to the Merger Agreement, pursuant to which the parties to the
Merger Agreement agreed to extend the date after which, if the merger has not yet been consummated, either party generally has the
right to terminate the Merger Agreement (which we refer to as the “Outside Date”) from November 9, 2016 to November 30, 2016. In
that connection, the relevant parties have also extended the termination date of each of the preferred equity commitment letter, the
rollover contribution and the debt commitment letter related to the equity and debt financing for the merger to November 30,
2016. The parties are continuing to work towards closing the merger as promptly as practicable. SBE and its partners, Yucaipa
Hospitality Investments, LLC and Cain Hoy Enterprises, L.P, and the Company have finalized the terms of an assumption of the
guarantee relating to the Hudson/Delano mortgage debt, and the mortgage guarantee assumption has been submitted to the rating
agencies for approval. Based on market practice, we anticipate that the rating agency confirmation process will take between two and
four weeks and that the merger would close promptly thereafter assuming all other conditions have been met or waived. SBE has
advised us that it has substantially completed the definitive documentation for each of the preferred equity commitment letter, the
rollover contribution and the debt commitment letter, and anticipates being able to consummate the transactions required by those
financing agreements promptly following receipt of rating agency confirmation in respect of the Hudson/Delano mortgage debt.
There can be no assurance that the condition to the merger related to the assumption or refinancing of the Hudson/Delano
mortgage debt will be satisfied, or that the other remaining conditions to the merger will be satisfied prior to the new Outside Date or
that the Outside Date will be further extended if the merger has not closed by November 30, 2016. If the Merger Agreement is
terminated by reason of the failure of SBE to satisfy the condition related to the assumption or refinancing of the Hudson/Delano
mortgage debt or the failure of SBE to obtain the other financing for the merger, we intend to seek payment by SBE of the termination
fee of $6.5 million. There can be no assurance whether SBE will make this payment or as to the timing of payment.
Item 9.01 Exhibits
Exhibit
Number
2.1
Description
Amendment No. 1 dated November 8, 2016 to the Agreement and Plan of Merger, dated as of May 9, 2016, by and
among Morgans Hotel Group Co., SBEEG Holdings, LLC and Trousdale Acquisition Sub, Inc.
Forward-Looking Statements
This report, and the documents to which the Company refers in this report, contain not only historical information, but also
forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements represent the Company’s expectations or beliefs concerning future events, including the timing of
the transaction and other information relating to the transaction. Forward-looking statements include information concerning possible
or assumed future results of operations of the Company, the expected completion and timing of the transaction and other information
relating to the transaction. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “intends,”
“forecasts,” “should,” “estimates,” “contemplate,” “future,” “goal,” “potential,” “predict,” “project,” “projection,” “may,” “will,”
“could,” “should,” “would,” “assuming” and similar expressions are intended to identify forward-looking statements. You should read
statements that contain these words carefully. They discuss the Company’s future expectations or state other forward-looking
information and may involve known and unknown risks over which the Company has no control. Those risks include, (i) the risk that
the transaction may not be completed in a timely manner or at all, including by reason of the unavailability of financing, which may
adversely affect the Company’s business and the price of the common stock of the Company, (ii) the failure to satisfy any of the
conditions to the consummation of the transaction, including the assumption or refinancing of the Company’s mortgage loan
agreements and the receipt of governmental and regulatory approvals, (iii) the occurrence of any event, change or other circumstance
that could give rise to the termination of the acquisition agreement, (iv) the effect of the announcement or pendency of the transaction
on the Company’s business relationships, operating results and business generally, (v) risks that the proposed transaction disrupts
current plans and operations and the potential difficulties in employee retention as a result of the transaction, (vi) risks related to
diverting management’s attention from the Company’s ongoing business operations and (vii) the outcome of any legal proceedings
that may be instituted against us related to the acquisition agreement or the transaction. Factors that may affect the business or
financial results of the Company are described in the risk factors included in the Company’s filings with the SEC, including the
Company’s 2015 Annual Report on Form 10-K and later filed quarterly reports on Form 10-Q and Current Reports on Form 8-K,
which factors are incorporated herein by reference. Forward-looking statements speak only as of the date of this communication or the
date of any document incorporated by reference in this document. Except as required by applicable law or regulation, the Company
does not undertake to update these forward-looking statements to reflect future events or circumstances.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
MORGANS HOTEL GROUP CO.
Date: November 9, 2016
By:
/s/ Richard Szymanski
Name:
Title:
Richard Szymanski
Chief Financial Officer
Exhibit 2.1
AMENDMENT NO. 1
TO THE
AGREEMENT AND PLAN OF MERGER
This AMENDMENT NO. 1 (this “Amendment”) is made and entered into as of November 8, 2016 among MORGANS HOTEL
GROUP CO., a Delaware corporation (“ Monroe ”), SBEEG HOLDINGS, LLC, a Delaware limited liability company (“ Trousdale ”),
and TROUSDALE ACQUISITION SUB, INC., a Delaware corporation (“ Sub-S ”), to amend that certain AGREEMENT AND
PLAN OF MERGER, dated as of May 9, 2016 (as amended hereby, and as it may be further amended from time to time, the “ Merger
Agreement ”).
WHEREAS, Section 8.03 of the Merger Agreement provides for the amendment of the Merger Agreement in accordance with
the terms set forth therein;
WHEREAS, the board of directors of Monroe and the board of managers of Trousdale have approved and declared advisable
this Amendment and the related transactions contemplated hereby, in each case, upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the parties hereto desire to amend the Merger Agreement as set forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein and for good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby,
the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Unless otherwise specifically defined herein, each term used herein shall have the meaning assigned to
such term in the Merger Agreement.
ARTICLE II
AMENDMENTS TO MERGER AGREEMENT
Section 2.01 Amendment to Merger Agreement. The Merger Agreement shall be amended as follows:
(a) In the preamble of the Merger Agreement, the words “(this ‘Agreement’)” shall be deleted and the words “(as amended by that
certain Amendment No. 1 to the Agreement and Plan of Merger, dated as of November 8, 2016 (the ‘ Amendment ’), and as it may
be further amended from time to time, this ‘ Agreement ’)” shall be substituted in their place.
(b) In Section 8.01(b) of the Merger Agreement, the words “if the Merger is not consummated on or before the date that is the
six-month anniversary of the date hereof (and if such date is not a business day, then the next following business day) (the ‘ Outside
Date ’)” shall be deleted and the words “if the Merger is not consummated on or before November 30, 2016 (the ‘ Outside Date ’)”
shall be substituted in their place.
ARTICLE III
MISCELLANEOUS
Section 3.01 No Further Amendment. The Merger Agreement is not modified except as explicitly set forth in this Amendment.
Section 3.02 Effect of Amendment. This Amendment shall form a part of the Merger Agreement for all purposes, and each party
thereto and hereto shall be bound hereby. From and after the execution of this Amendment by the parties hereto, any reference to the
Merger Agreement shall be deemed a reference to the Merger Agreement as amended hereby.
Section 3.03 Governing Law. This Amendment, and all claims or causes of action (whether in contract or tort) that may be based
upon, arise out of or relate to this Amendment or the negotiation, execution or performance of this Amendment (including any claim
or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this
Amendment), shall be governed by and construed in accordance with the internal laws of the State of Delaware.
Section 3.04 Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent
jurisdiction or other Governmental Entity to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as
the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.
Upon such a determination, the parties shall negotiate in good faith to modify this Amendment so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
Section 3.05 Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument. Until and unless each party has received a
counterpart hereof signed by the other parties hereto, this Amendment shall have no effect and no party shall have any right or
obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
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Section 3.06 Headings. The descriptive headings in this Amendment were formulated, used and inserted in this
Amendment for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.
[Signature Page Follows]
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective
authorized officers as of the day and year first above written.
MORGANS HOTEL GROUP CO.
By
/s/ Richard Szymanski
Name:
Title:
Richard Szymanski
Chief Financial Officer
[Signature Page to Amendment No. 1 to the Agreement and Plan of Merger]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective
authorized officers as of the day and year first above written.
SBEEG HOLDINGS, LLC
By
/s/ Sam Nazarian
Name:
Title:
Sam Nazarian
Chairman & Chief Executive Officer
TROUSDALE ACQUISITION SUB, INC.
By
/s/ Sam Nazarian
Name:
Title:
Sam Nazarian
Chairman & Chief Executive Officer
[Signature Page to Amendment No. 1 to the Agreement and Plan of Merger]