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Shares in Soho House sank more than 20 per cent after the members’ club operator disclosed that a major backer of its take-private deal had pulled a $200mn funding commitment, putting the plans in jeopardy.
After decades of global expansion and a turbulent stint as a public company after a 2021 stock market listing in New York, Soho House announced in August that it was returning to private ownership in a $2.7bn deal with a group of investors led by New York-based MCR Hotels.
But Soho House said in a filing on Thursday that MCR Hotels had cancelled its commitment to purchase $200mn of the company’s shares at $9 per share. That price was a premium on the company’s share price in August, but well shy of the $14 price tag when Soho House floated in 2021.
Soho House shares, which had jumped last year on news of the deal, sank as much as 21 per cent in early trading in New York on Thursday, before settling at about $7.50.
The member’s club operator has grown from a trendy London venue to a global empire, but some critics argue that its focus on growth has come at the expense of exclusivity and coolness, making it too easy to get a membership while service levels dipped.
At the end of 2024, the average number of members per Soho House venue was 4,700, up 30 per cent since 2021.
MCR Hotels owns more than 25,000 guest rooms across the US, including the 1960s-themed TWA Hotel at JFK airport. When the deal with Soho House was announced in August, MCR Hotels said it planned to expand the members’ club operator by opening sites rather than adding throngs of new members to the existing houses.
MCR Hotels did not immediately respond to a request for comment.
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