Activist shareholder Gregory Cohen of Rambleside Holdings is looking to shake things up at Morgans Hotel Group, having sent a letter to the Morgans board this weekend expressing “serious concerns about the strategic direction of the company” and suggesting steps to reform the beleaguered hotel operator’s governance.
Cohen’s letter, addressed to Morgans chair Howard Lorber and others on the company’s board of directors, says the company “is now facing a crisis” that has seen its share price drop to $1.69 at the close of trading last week. The letter could kick off a proxy fight for control of Morgans — with Cohen, who owns just under 5 percent of the company’s common stock, backed by former Morgans CEO Fred Kleisner.
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The correspondence mentions how Rambleside, the real estate investment firm helmed by Cohen, offered last year to buy two hotels owned by Morgans – including the Hudson New York in Midtown – for $507 million, only for the offer to be “never meaningfully engaged with” by the company’s board of directors.
