NEW YORK, June 20, 2011 /PRNewswire/ — Morgans Hotel Group Co. (NASDAQ: MHGC) (“MHG” or the “Company”) announced today that it has acquired the remaining 50% interests that it does not already own in its food and beverage joint ventures from China Grill Management (“CGM”) for approximately $20 million.

Additionally, the Company converted CGM’s long-term management arrangements to short-term cancellable management agreements for each property. Pursuant to these short-term agreements, CGM will continue to manage the operations for a transitional period while MHG reassesses its food and beverage strategy.

Michael Gross, Chief Executive Officer of MHG said, “Food and beverage is a key element to our brand and guest experience and we have an opportunity to enhance our offering in this area. This transaction is an important step in that direction allowing us to actively reassess our food and beverage concepts and make changes that will benefit our customers and our business.”

Based on 2010 results, the $20 million purchase price represents a 5.7x multiple on EBITDA of $3.5 million based on CGM’s ownership and management fees. The purchase price was funded through cash on hand generated through the recent sales of Mondrian Los Angeles, Royalton and Morgans.

About Morgans Hotel Group

Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first “boutique” hotel and a continuing leader of the hotel industry’s boutique sector. Morgans Hotel Group operates Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles, South Beach and New York, Clift in San Francisco, Ames in Boston, Sanderson and St Martins Lane in London, and hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans also owns, or has ownership interests in, several of these hotels. Morgans Hotel Group has other property transactions in various stages of completion including a Delano in Cabo San Lucas, Mexico, a Delano in Turkey, a Mondrian in Doha, Qatar and a hotel in New York to be branded with one of MHG’s existing brands. For more information please visit www.morganshotelgroup.com.

Forward-Looking and Cautionary Statements

This press release may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs and prediction of certain future other events. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “expect,” “anticipate,” “estimate” “believe,” “project,” or other similar words or expressions. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results or other future events to differ materially from those expressed in any forward-looking statement. Important risks and factors that could cause our actual results to differ materially from those expressed in any forward-looking statements include, but are not limited to economic, business, competitive market and regulatory conditions such as: a sustained downturn in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; continued tightness in the global credit markets; general volatility of the capital markets and our ability to access the capital markets; our ability to refinance our current outstanding debt and to repay outstanding debt as such debt matures; our ability to protect the value of our name, image and brands and our intellectual property; risks related to natural disasters, such as earthquakes, volcanoes and hurricanes; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; and other risk factors discussed in Morgans’ Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and other documents filed by Morgans with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and Morgans assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.

SOURCE Morgans Hotel Group Co.