Morgans Hotel Group Announces Agreement to Sell The Light Group to Hakkasan Group for $36 Million

Morgans Hotel Group Announces Agreement to Sell The Light Group to Hakkasan Group for $36 Million
Morgans Hotel Group Co.
today announced that it has entered into a definitive agreement to sell its 90% controlling interest in The Light Group (“TLG”), a leading lifestyle food & beverage company, to Hakkasan Group, a worldwide dining, entertainment, and hospitality company, for a total enterprise value of $36 million. 

The purchase price includes the remaining 10% equity interest in TLG held by Andrew Sasson, TLG’s founder, and Andy Masi, TLG’s Chief Executive Officer. The transaction was approved by the Company’s Board of Directors as a part of its ongoing review of strategic alternatives to maximize value for stockholders.

As part of the transaction, Morgans Hotel Group will assume control of the food & beverage offerings from TLG at its iconic Delano South Beach hotel. The Company will also retain its leasehold interests in the three Mandalay Bay restaurants that will continue to be managed by TLG, as well as an option to buy a minority interest in TLG for a period of up to 18 months post-closing.

Hakkasan Group’s restaurant portfolio includes the flagship Hakkasan Restaurant with 12 locations worldwide, as well as Yauatcha, HKK, Sake no Hana, Herringbone, Searsucker and Social House. Under the nightlife & daylife umbrella of brands are Hakkasan Nightclub, Wet Republic and Omnia Nightclub (opening in Las Vegas and in San Diego, Spring 2015). Herringbone’s Los Angeles location is currently located in Morgans Hotel Group’s Mondrian hotel in West Hollywood.

Jason T. Kalisman, Chairman of the Board and Interim Chief Executive Officer of Morgans Hotel Group, stated: “The sale of The Light Group allows us to deliver significant value to stockholders and demonstrates the success of the Special Transaction Committee’s ongoing strategic review process. Not only does the transaction strengthen Morgans Hotel Group’s financial position, but we will also have an enhanced focus on our core assets. Under Andy Masi’s direction, The Light Group has established itself as a strong brand, and we expect the business will thrive as part of Hakkasan Group.”

“We are thrilled to be bringing The Light Group and its unrivaled nightlife, daylife and restaurant offerings under Hakkasan Group’s umbrella,” said Neil Moffitt, Chief Executive Officer of Hakkasan Group. “The acquisition of a majority stake in The Light Group is another step forward in our ambitious investment strategy to deliver exceptional guest experiences. The agreement increases our dining and entertainment portfolio with an additional 22 nightlife, daylife and restaurant properties, making Hakkasan Group Las Vegas’ largest non-gaming dining, entertainment and hospitality company. Hakkasan Group and The Light Group are highly complementary businesses and we intend to assume and maintain the vast majority of The Light Group’s contracts, licenses and events.”

The transaction is subject to customary closing conditions and is expected to close in January 2015. Following the successful completion of the sale, Morgans Hotel Group will continue to own, operate, manage, franchise and/or license its 14 hotel properties around the world. Additionally, the Company’s Special Transaction Committee continues to work with its financial adviser, Morgan Stanley & Co., to identify all additional potential strategic alternatives, including capital raising, asset sales, strategic partnerships, a sale of the entire Company, a sale of component parts of the Company, acquisitions and other alternatives.

Morgan Stanley & Co. served as financial advisor to Morgans Hotel Group and Ropes & Gray LLP served as its legal advisor. Greenberg Traurig LLP served as legal advisor to Hakkasan.

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