Soho House Nears $9-Share Go-Private Deal: Report

A group of investors led by New York-based MCR Hotels is nearing a deal to acquire Soho House & Co (SHCO), valuing the private members club chain for $1.8 billion without debt, the Wall Street Journal reported late Sunday, citing people familiar with the matter.

According to the report, investors plan to pay $9 for the company’s outstanding public stock, which is over 18% higher than the stock’s $7.64 closing price on Friday. Soho House’s controlling shareholder, Ron Burkle, and certain other shareholders will roll over their stakes.

Apollo Global Management is expected to provide more than $700 million in equity and debt financing, the report added.

The potential deal would effectively end an activist campaign by Dan Loeb and his hedge fund Third Point, which had disclosed a 10% stake in Soho House in January and had been pushing the company to consider outside bidders following a $9-a-share takeover bid.

Soho House was founded in London in 1995 and opened a club in New York in 2003. The clubs, which give members access to private dining, bars, and live events, have gained prominence over the years, getting a significant boost after a Soho House club was featured in an episode of “Sex and the City.” Celebrities like Lady Gaga, Prince Harry, and Meghan Markle have reportedly been spotted at Soho clubs.

The business has struggled at times to balance rapid growth with exclusivity, as members have complained that the service has slowed with increased membership and that pool spots are scarce.

More recently, Soho House’s financial results have improved. The company earlier this month reported its third straight quarter of net profit. The second-quarter results showed that membership revenue grew at 15.9% year-over-year.

Soho House went public in 2021. Its shares are up 2.6% year-to-date. On Stocktwits, the retail sentiment was ‘bullish’ for the stock as of the last reading.

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