Ron Burkle can finally check into Morgans Hotel Group and its 878-room Hudson Hotel on Columbus Circle after a three-year wait.
His Yucaipa Cos. led a group of buyers early Wednesday morning that closed a deal to buy the boutique hotel operator for $2.25 a share, or $805 million, the parties confirmed.
Yucaipa and financier Cain Hoy Enterprises split a 50 percent stake with SBE Entertainment retaining the other half.
The expanded company will have a portfolio of 22 hotels including the Delano and Mondrian brands.
Yucaipa and Cain Hoy will also own $150 million of preferred shares in the new combined company that will be senior in the capital structure to the common shares, a source said.
Burkle can now add Morgans to his stable of hotel properties that includes the Soho Club, NoMad Hotel, Freehand Hotel, the Lion Hotel and Discovery Properties.
His interest in Morgans dates back to 2009, when Yucaipa loaned $75 million to a desperate Morgans during the financial crisis.
In November 2013, Burkle bid $8 a share, or $278 million, for the chain. Morgans rejected the bid even though Burkle through his preferred shares had the right to block significant asset sales without his approval, and the dividend on Burkle’s preferred shares was set to jump from 10 to 20 percent in 2016.
Morgans this year found itself in a difficult situation due to higher interest rates and a declining business.
The New York Post broke the news May 5 that Burkle was close to a deal to buy the chain. At the time, Morgans shares had fallen to $1.33.