424B7 1 y57994e424b7.htm FILED PURSUANT TO RULE 424(B)(7) 424B7
Filed Pursuant to Rule 424(b)(7)
Registration No. 333-149249
PROSPECTUS SUPPLEMENT NO. 2
(TO PROSPECTUS DATED FEBRUARY 26, 2008)
7,858,755 Shares
(MORGANS HOTEL GROUP CO.)
Morgans Hotel Group Co.
Common Stock
 
     This prospectus supplement supplements information contained in the prospectus dated February 26, 2008, as supplemented by a prospectus supplement, dated March 24, 2008, covering resales by selling securityholders of shares of our common stock issuable upon conversion of our 2.375% Senior Subordinated Convertible Notes due 2014.
     This prospectus supplement should be read in conjunction with, and may not be delivered or utilized without, the prospectus, as supplemented prior to the date hereof. This prospectus supplement is qualified by reference to the prospectus, as supplemented prior to the date hereof, except to the extent that the information in this prospectus supplement supersedes the information contained in the prospectus and any supplement thereto. The terms of the common stock issuable upon conversion of the notes are set forth in the prospectus.
 
     Investing in the common stock issuable upon conversion of the notes involves risks. You should consider the risks that we have described in “Risk Factors” beginning on page 1 of the prospectus, as well as the risk factors that are incorporated by reference in the prospectus from our Annual Report on Form 10-K for the year ended December 31, 2007.
 
     Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement, the prospectus or any supplement thereto is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is May 16, 2008

 


 

SELLING SECURITYHOLDERS
     The selling securityholders set forth below, including their transferees, pledgees or donees or their successors, may from time to time offer and sell pursuant to this prospectus supplement, the prospectus and any other accompanying prospectus supplement, post-effective amendment or filing we make with the SEC under the Exchange Act that is incorporated by reference in the prospectus, any or all of the share of common stock which we may issue upon the conversion of the notes.
     The information in the table below should be considered in addition to the information appearing in the prospectus, as supplemented prior to the date hereof, under the heading “Selling Securityholders” and is based on information provided by the selling securityholders as of May 16, 2008. The selling securityholders may offer all, some or none of the shares of common stock which we may issue upon the conversion of the notes. Because the selling securityholders may offer all or some portion of such common stock, we cannot estimate the number of shares of common stock that will be held by the selling securityholders upon termination of any of these sales. In addition, since the date on which they provided the information regarding their notes, the selling securityholders identified below may have sold, transferred or otherwise disposed of all or a portion of their notes or common stock in transactions exempt from the registration requirements of the Securities Act.
     The number of shares of common stock issuable upon the conversion of the notes shown in the table below assumes conversion of the full amount of notes held by each selling securityholder at the maximum conversion rate of 45.5580 shares of common stock per $1,000 principal amount of notes and a cash payment in lieu of any fractional share. This conversion rate is subject to adjustment in certain events. Accordingly, the number of shares of common stock issued upon the conversion of the notes may increase or decrease from time to time. The number of shares of common stock owned by the other selling securityholders or any future transferee from any such holder assumes that they do not beneficially own any shares of common stock other than the common stock that we may issue to them upon the conversion of the notes.
     Except as set forth in the table below, based upon information provided by the selling securityholders, none of the selling securityholders nor any of their affiliates, officers, directors or principal equity holders has held any positions or office or has had any material relationship with us within the past three years.
     To the extent any of the selling securityholders identified below are broker-dealers, they may be deemed to be, under interpretations of the staff of the SEC, “underwriters” within the meaning of the Securities Act. To our knowledge, except as described below, the selling securityholders have sole voting and investment power with respect to all of the shares of common stock shown as beneficially owned by them.
                                         
            Percentage of                   Percentage of
    Number of Shares   Shares           Number of Shares   Shares
    Beneficially   Beneficially   Number of   Beneficially Owned   Beneficially
    Owned Prior to the   Owned Prior to   Shares Offered   After the   Owned After the
Name   Offering   the Offering (1)   Hereby   Offering (2)   Offering (1) (2)
Wilshire Institutional Master Fund SPC-Wilshire Castle Creek Convert Arb Segregated
Portfolio (3)
    13,986       *       13,986             *  
CC Arbitrage, Ltd. † (4) (5)
    543,871       1.66 %     543,871             *  
Ellington Overseas Partners, LTD (6)
    1,287,013       3.85 %     1,287,013             *  
Thomas Weisel Partners, LLC †
    341,685       1.05 %     341,685             *  
Oppenheimer & Co. Inc. †
    91,116       *       91,116             *  
 
*   Less than 1%

 


 

  The selling securityholders identified with a crosshatch have indicated that they are, or are affiliates of, registered broker-dealers. These selling securityholders have represented that they acquired their securities in the ordinary course of business, and, at the time of the acquisition of the securities, had no agreements or understandings, directly or indirectly, with any person to distribute the securities. To the extent that we become aware that any such selling securityholder did not acquire its securities in the ordinary course of business or did have such an agreement or understanding, we will file a post-effective amendment to the registration statement of which this prospectus supplement, the prospectus and any supplements thereto are a part to designate such person as an “underwriter” within the meaning of the Securities Act.
 
(1)   Based on a total of 32,169,424 shares of common stock outstanding as of May 8, 2008. In calculating these percentages for each holder of notes, we also treated as outstanding that number of shares of common stock issuable upon conversion of that holder’s notes. However, we did not assume the conversion of any other holder’s notes in calculating these percentages.
 
(2)   Assumes the selling securityholder sells all of its shares of common stock offered pursuant to this prospectus supplement, the prospectus and any supplements thereto.
 
(3)   Castle Creek Arbitrage, LLC is the investment advisor to the selling securityholder, and as such, has dispositive and voting power with respect to these securities. Castle Creek Arbitrage, LLC disclaims beneficial ownership of such shares. Daniel Asher and Allan Weine are Castle Creek Arbitrage, LLC’s managing members. Messrs. Asher and Weine disclaim beneficial ownership of the shares owned by the selling securityholder.
 
(4)   The information in this prospectus supplement regarding this selling securityholder supersedes the information regarding this selling securityholder previously included in the prospectus, as supplemented prior to the date hereof.
 
(5)   As investment manager under a management agreement, Castle Creek Arbitrage, LLC may exercise dispositive and voting power with respect to the shares owned by CC Arbitrage, Ltd. Castle Creek Arbitrage, LLC disclaims beneficial ownership of such shares. Daniel Asher and Allan Weine are the managing members of Castle Creek Arbitrage, LLC. Messrs. Asher and Weine disclaim beneficial ownership of the shares owned by CC Arbitrage, Ltd.
 
(6)   Ellington Management Group, LLC is the investment advisor of the selling securityholder. Michael Vranos, as principal of Ellington Management Group, LLC, has voting power and investment control with respect to these securities. Mr. Vranos disclaims any beneficial ownership over such securities, except to the extent of any indirect ownership interest he may have in such securities through his economic participation in the selling securityholder.