Golden Gaming to Operate Hard Rock Hotel Gaming Facilities
LAS VEGAS, NV, July 12, 2006. Morgans Hotel Group, Co. (Nasdaq: MHGC) today announced that it has entered into a non-binding Letter of Intent with Golden Gaming, Inc. for Golden Gaming or an affiliate to serve as casino operator for the Hard Rock Hotel & Casino following its acquisition by MHG. MHG's pending acquisition of the Hard Rock Hotel & Casino, located in Las Vegas, was announced on May 11, 2006.
The LOI contemplates that Golden Gaming will provide general management services for all gaming and related activities within the Hard Rock Hotel & Casino for a period of up to two years. The financial terms are consistent with MHG's earlier guidance and will be fully disclosed once a definitive agreement has been executed. In addition, the LOI provides that Golden Gaming shall have the opportunity to make an equity investment of up to $100 million in the Hard Rock Hotel & Casino on terms to be agreed between MHG and Golden Gaming.
"We are pleased that we have reached agreement with Golden Gaming to serve as the licensed casino operator for the Hard Rock," said W. Edward Scheetz, President and Chief Executive Officer of MHG. "Lining up a casino operator was a top priority for us and we now have put into motion a key element of the Hard Rock transition. We are delighted to be working with Blake Sartini and his talented team. Blake is a respected industry veteran and we look forward to working together toward a successful launch of the Hard Rock under MHG's ownership."
"The addition of the Hard Rock represents a major step in the execution of our growth strategy while maintaining our commitment to providing the best boutique hotel experience available. We are actively pursuing other opportunities with respect to our Hard Rock purchase, including alternatives for the development of the land and for monetization of intellectual property rights. Perhaps most importantly, we are focused on identifying equity partners and we are currently in discussions with potential partners. We are pleased with the interest we are seeing and expect to announce our partners before the close of the transaction," continued Mr. Scheetz. "The Hard Rock is a great strategic fit for Morgans Hotel Group and it accelerates our entry into Las Vegas, one of the fastest growing hotel markets in the world. We are delighted that we took the prize in a competitive process and we look forward to closing the transaction as soon as possible."
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