Soho House agrees $2.7bn take-private deal

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Soho House, the once-edgy London members’ club that turned exclusivity into a global business, has agreed a $2.7bn deal to be taken private by one of the biggest US hotel owners.

In a statement on Monday, Soho House said it had reached an agreement with a group of investors led by New York-based MCR Hotels to buy out its remaining public shareholders at $9 a share.

The take-private deal values the company’s equity at roughly $1.8bn, excluding debt, according to people familiar with the matter.

It hands investors a premium over Friday’s $7.60 close — though still well shy of the $14 price tag when Soho House floated in 2021.

Apollo Global Management, the alternative asset manager, is providing more than $800mn in debt and equity financing, the people added.

MCR Hotels owns more than 25,000 guest rooms across the US, including the 1960s-themed TWA Hotel at JFK airport.

Ron Burkle, the club’s billionaire backer who has long controlled the group, will roll over his stake along with other existing investors, said people briefed on the matter.

The deal draws a line under months of agitation by activist Dan Loeb, whose hedge fund Third Point had pressed the board to seek outside suitors to secure a higher valuation.

The take-private move comes after Soho House struggled as a public company. 

Last year, New York short seller GlassHouse slammed what it called a “broken business model and terrible accounting”, claiming the group’s expansion into less affluent cities betrayed its brand and masked the fact it had never turned a profit in its 28-year history. 

Management hit back with an independent review that, it said, found “no material issues” in the company’s books.

Over the past few quarters, the business has shown signs of turning a corner. Earlier this month, it reported its third straight quarterly profit.