Sam Nazarian In Advanced Talks To Merge His Company With Morgans Hotel : WSJ

(RTTNews) - Los Angeles hotelier Sam Nazarian is in advanced talks to combine his company with Morgans Hotel Group Co. (MHGC), the Wall Street Journal reported citing people familiar with the matter.

Nazarian, founder and chief executive officer of SBE Entertainment Group, is expected to take over as CEO of the combined company, the report said.

According to the report, Billionaire private equity investor Ronald Burkle, who is Morgans' largest creditor and owns preferred equity in that company, will have a board seat with the new firm and is weighing additional investments in the combined company.

The new company would manage 19 hotels in cities like Los Angeles, New York, Miami and London and would include the hotel brands SLS, Delano, and Mondrian. SBE also owns restaurant and high-end nightclub brands such as Hyde.

The report indicated that a deal could be announced as early as this month. Financial terms aren't known. Morgans' shares trade on the Nasdaq Stock Market and the combined company also will be publicly traded.

MHGC closed Thursday's trading at $5.63, up $0.41 or 7.85%.