Merger between Hakkasan-sbe appears to be dead

The sounds of silence emanating from sbe Entertainment and Hakkasan Group about their planned merger are deafening.

Ever since sbe Chief Executive Officer Sam Nazarian announced in March the two companies would complete a pooling of assets by June to create a global lifestyle hospitality giant, barely a peep has been heard from either side.

The company sbe issued a statement in October outlining its large-scale expansion plans through 2021, yet the company made no mention of the Hakkasan merger.

Employees at Hakkasan and sbe establishments in Las Vegas said they haven’t heard anything about the deal from management in months.

Several Las Vegas nightclub industry insiders, speaking on the condition of anonymity to not harm relationships with either company, said they believe the deal is dead.

An sbe spokesman declined to comment. Hakkasan spokesman Brett Perkins was traveling and could not immediately give a company statement.

Just days after Nazarian made his announcement, then-Hakkasan Group Chief Executive Officer Neil Moffitt told hundreds of attendees at the Nightclub and Bar Show in Las Vegas that industry consolidation was important to keep margins afloat.

However, Moffitt then stepped down, raising speculation he didn’t want to play second fiddle to Nazarian, who would likely have run the combined company.

Hakkasan is owned by Alliance International Investment, a Dubai-based holding company with interests in energy, retail, real estate as well as hospitality. Alliance holds ”controlling” stakes in its subsidiaries, according to its website. Alliance did not respond to a request for comment on the merger and its delay.

The company sbe is majority controlled by Sam Nazarian. Yucaipa Hospitality Investments and Cain Hoy Enterprises LP own a 25 percent and 11.25 percent stake in sbe, respectively.

Powerful lineup

The pooling of assets would have given sbe a powerful lineup of restaurant, nightclub and day club brands to bring to its global chain of boutique hotels. It plans to more than double its current portfolio of hotels from 22 to 50 by 2021 and place 24 of its own restaurant and lounge brands at those locations, the company said in the October statement. It owns such brands as Hyde Lounge, Umami Burger and Bazaar by Jose Andres.

The merger would also have given the combined company a powerful presence in the Las Vegas nightlife and restaurant industry. Hakkasan Group owns the Hakkasan, Omnia and Jewel nightclub brands as well as Searsucker, Herringbone and Citizen restaurant brands. They are among the dozen businesses Hakkasan runs in Las Vegas.

Los Angeles-based sbe would have been able to create a strong bridge between its Southern California customer base and its expanded portfolio of properties in Las Vegas, said one local night club competitor. Southern California accounts for about a quarter of visitors to Las Vegas.

Contact Todd Prince at tprince@reviewjournal.com or 702-383-0386. Follow @toddprincetv on Twitter.