Morgans Hotel Group Co. (NASDAQ:MHGC) ("Morgans Hotel Group" or the "Company") today confirmed that it has received a letter from The Yucaipa Companies, LLC, ("Yucaipa") containing an unsolicited and conditional proposal to acquire Morgans Hotel Group for $8.00 per share.

The Company's Board of Directors will carefully review the proposal with its financial and

legal advisors and will determine the appropriate response in due course. The Company advises its shareholders not to take any action at this time in response to Yucaipa's proposal, and instead to wait for the response of the Company's Board of Directors.

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 Delano in South Beach, Mondrian in Los Angeles, New York, South Beach and London, Hudson in New York, Morgans and Royalton in New York, Clift in San Francisco, Shore Club in South Beach and Sanderson and St Martins Lane in London. Morgans Hotel Group has ownership interests or owns several of these hotels. Morgans Hotel Group also licenses a Delano in Las Vegas. Morgans Hotel Group has other hotels in various stages of development to be operated under management or franchise agreement, including a Mondrian property in Doha, Qatar and a Morgans Original in Istanbul, Turkey. Morgans Hotel Group also owns a 90% controlling interest in The Light Group, a leading lifestyle food and beverage company. For more information please visit www.morganshotelgroup.com.