Morgans Hotel Grp. Co. (NASDAQ:MHGC)
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Shareholders of Morgans Hotel Group Inc. approved this week a sale to SBE Entertainment Group, SBE officials said, in a deal with a total enterprise value of about $800 million.

Holders of about 71% of Morgans outstanding common shares approved the sale, SBE said. The deal, which pays Morgans stockholders $2.25 a share and takes the company private, is expected to close before year-end. Shares were trading at $1.96 on Thursday, down 1%. SBE and Morgans reached an agreement in May.

The combined company will own or operate 20 hotels in cities like Miami Beach, New York, Los Angeles and London. It will include SBE's SLS brands, as well restaurants and nightclubs, and Morgans hotel brands like Delano and Mondrian. The Los Angeles-based SBE would also acquire properties in Miami Beach and Manhattan through the sale.

SBE chief executive Sam Nazarian has been trying to acquire or merge with Morgans for years. He initially wanted to take his company public through an acquisition of the New York-based hotel operator that trades on the Nasdaq market.

Extensive merger talks in 2015 collapsed after months of negotiations, but may have worked to Mr. Nazarian's favor in the end. He is paying about a third of the price for Morgans of where the shares were trading early last year when the two sides began talking.

Morgans, a small but influential lodging brand, was founded in the 1980s by nightclub impresarios Ian Schrager and Steve Rubell. Its stylish hotels and thumping public spaces helped usher in the boutique hotel model.

In more recent years, the company has struggled with financial losses and turnover at the top as all the major hotel operators launched their own boutique brands and competed for the same young or style-conscious guests.

Write to Craig Karmin at craig.karmin@wsj.com

(END) Dow Jones Newswires

September 29, 2016 15:55 ET (19:55 GMT)