Kerrisdale Plans To Nominate Separate Set Of Directors For Morgans Hotel In 2014

(RTTNews) - In a letter to stakeholders of Morgans Hotel Group Co. (MHGC), Kerrisdale Capital Management said that it intends to nominate a separate set of directors to the board of Morgans Hotel Group in the 2014 board of directors election.

Kerrisdale, a private investment management firm and beneficial owner of more than 4% of the shares of Morgans Hotel Group, said it believed that the current directors of Morgans Hotel do not adequately represent the interests of the majority of shareholders.

Kerrisdale also believed that the views of OTK Associates, which owns less than a 15% economic interest, are currently over-represented on the Morgans Hotel board, and the views of the other 85% of shareholders are severely under-represented.

Kerrisdale believe that the overwhelming consensus view of the company's ownership is that Morgans should initiate an immediate public sale process to sell the company to one or multiple strategic acquirers.

"Despite repeated calls for an immediate sale process by shareholders including Caerus Global Investors and ourselves, as well as significant creditor Yucaipa Companies, the new Board has yet to issue a public response," Kerrisdale said in letter.

Kerrisdale noted that it will support a carefully chosen slate of financial, industry and mergers and acquisitions experts to serve as directors of Morgans.