Morgans Hotel Chairman Jason Kalisman has bested billionaire shareholder activist Ron Burkle — again.
The company, owner of the Hudson, Delano and Mondrian hotel brands, on Monday reported that it had borrowed $450 million against two of its marquee properties — a move, sources said, that will allow Morgans to pay off roughly $220 million of debt held mostly by Burkle.
The debt deal relieves Kalisman of a major headache, as Burkle had been pressing the 35-year-old executive to sell the company.
The successful refinancing sparked a 5.2 percent rise in Morgans shares on Monday, to $7.90.
“Burkle is pissed off,” a source close to the situation said.
In November, Burkle’s Yucaipa Cos. made a proposal to purchase the company for $8 a share.
With the successful refi and the stock rise, much of the wind has come out of the sails of that offer.
Last June, Kalisman scored his first knockout when he succeeded in ousting Burkle from the Morgans board in a proxy fight.
Kalisman was unhappy with Burkle’s plan to have the company sell him its Delano hotel in South Beach, Miami.
Now, Kalisman through the debt offering has gotten Citigroup to value Morgans’ Hudson Hotel in New York and the Delano in South Beach at between $600 million and $640 million, well above the consensus $550 million valuation, sources said.
Next for the Ian Schrager-founded Morgans, which also owns the chic Royalton Hotel in New York, is a possible sale of either the Hudson or Delano, a source close to the situation said.
“The [refinancing] puts them in a position to sell one or two hotels or the whole company,” MKM Analyst Chris Agnew said.
With its previously imposing debt, a sale of the company could have been viewed as a fire sale and could have fetched a lower price, Agnew said.
The Kalisman family owns a 13 percent Morgans stake. It bought the shares at $15.20.
Now, the family can be a bit more patient about selling at a price more advantageous to them.
Kalisman, like Burkle, feels the boutique hotel group eventually fits better within a larger hotel group, sources said.
What can still trip Kalisman up is if activist investor Kerrisdale Capital Management elects to run a proxy fight at the June annual meeting, a source said.
In his loan agreement, Burkle has agreed not to run a proxy fight, sources said.
Burkle still owns warrants to buy roughly $25 million worth of shares in the $265 million company.
Morgans and Burkle declined comment for this story.