Morgans and SBE in merger talks

George Sell George Sell Uploaded 08 August 2015

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US: The Wall Street Journal is reporting that Morgans Hotel Group and SBE Entertainment Group are in merger talks

US: The Wall Street Journal is reporting that Morgans Hotel Group and SBE Entertainment Group are in merger talks.

Sam Nazarian, founder and CEO of SBE - the parent company of the SLS Hotels brand - is expected to take over as CEO of the combined company, sources told The Wall Street Journal. The merged company will manage 19 hotels in the US, UAE and Europe.

Both Morgans and SBE have found themselves in the courts recently. According to The Los Angeles Times, investigators traced over $3 million in payments from Nazarian to a felon with convictions for drug possession and money laundering, though Nazarian claimed the payments were rooted in extortion. The Times also reported Nazarian being named in a lawsuit accusing him of cheating investors out of $8 million intended to upgrade and operate a Miami hotel. Nazarian's lawyer called the allegations "baseless," and the lawsuit "frivolous."

Morgans Hotel Group, founded by Ian Schrager and Steve Rubell in the late 1980s, filed a $210-million lawsuit in September 2014against LM Legacy Group over the loss of a management deal. Morgans claimed the owners failed to complete the construction of a stalled hotel project in Manhattan's Meatpacking District and wrongfully terminated a 15-year management deal.

www.morganshotelgroup.com
slshotels.com

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