Morgans Hotel Group, which is locked in a proxy battle with its largest shareholder, reaffirmed its intention to try to sell the company and dismissed the shareholder’s efforts to bring in a new slate of directors.
Morgans said that it would pursue a sale if its board was re-elected on June 14, and that its largest creditor, Yucaipa Cos., wouldn’t bid on the company.
Earlier this week, OTK Associates, which owns 14% of Morgans, continued its criticism of the board, saying in a statement that the board’s consideration of a sale is “simply another shameless and desperate attempt by the board to undermine an ongoing proxy contest and entrench itself.”
OTK has bashed the board for what it says is mismanagement of a company overly influenced by Yucaipa.
Morgans said in a statement Friday that an OTK-elected board would “result in significant uncertainty and a stalemate” with Yucaipa, while not addressing the company’s debt issues.
Follow Danny King on Twitter @dktravelweekly.