Soho House Signs $2.7 Billion Deal to Go Private

LONDON, Britain — Soho House will go private in a $2.7 billion deal led by New York-based MCR Hotels. This decision comes after a challenging market run that has dramatically affected the high-end members club’s value since its public debut in 2021.

Current shareholders will receive $9 per share, reflecting a 17.8% premium from the last closing price. Following the news, Soho House shares surged more than 15% to approximately $8.80 in early afternoon trading.

Prominent actor and tech investor Ashton Kutcher will join the board as part of the deal, while Neil Thomson will replace Thomas Allen as chief financial officer immediately.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, expressed skepticism about the club’s long-term success. “Soho House will need more than celebrity stardust to cement its future,” Streeter said. Concerns have arisen regarding the impact of rapid expansion on the club’s exclusive image, especially amid a broader consumer spending slowdown in the hospitality sector.

Founded by restaurateur Nick Jones in 1995 on Greek Street in London, Soho House has since grown to include locations across Europe, North America, and Asia. However, the club has struggled to achieve profitability despite growth in membership and revenue.

Hedge fund manager Daniel Loeb, who owns nearly 10% of Soho through his firm Third Point, expressed his support for the deal. “As both a shareholder and Soho House member, I support this transaction and am pleased to see management of the club in good hands,” Loeb said.

Under the new agreement, MCR Hotels will acquire the club’s publicly traded shares, while Jones and executive chairman Ron Burkle, along with his investment firm Yucaipa, will maintain majority control. Collectively, they own about three-quarters of the company.

Apollo Global Management’s affiliates are backing the deal through hybrid capital financing, with around $850 million invested in debt and equity, according to sources. Apollo CEO Marc Rowan expects hybrid financing to become a leading segment of the firm’s operations.

This transaction marks a pivotal moment for Soho House, transitioning from a struggling public company to a privately held entity, as it aims to enhance growth and profitability amidst industry challenges.