Soho House secures funding to complete $1.8bn takeover deal

Soho House has secured fresh financing to complete its $1.8 billion take-private deal, stabilising a transaction that had been thrown into doubt just weeks ago.

The London-based private members’ club group said it has now locked in alternative funding to replace a $200 million shortfall, clearing the way for a consortium led by MCR Hotels to complete the acquisition.

In a regulatory filing, Soho House confirmed that Morse Ventures, owned by Tyler Morse, chief executive of MCR Hotels, will provide a $50 million equity commitment. MCR itself will also contribute a further $50 million in equity under its original agreement.

The remaining funding has been secured through changes to the group’s debt structure and shareholder arrangements. Soho House has amended its financing package with Apollo and Goldman Sachs, increasing its senior unsecured notes facility to $220 million from $150 million. As part of the restructuring, Apollo’s equity commitment has been reduced from $50 million to $30 million.

The final $50 million gap was bridged after major shareholders agreed to roll over their equity rather than take cash, reducing the total funding required to complete the deal.

The revised structure follows a turbulent period for the company. Earlier this month, Ron Burkle’s investment firm Yucaipa disclosed that MCR, previously a cornerstone backer, would not be able to deliver its full equity commitment by the expected closing date. That announcement sent Soho House shares tumbling by almost 10 per cent and raised questions over whether the transaction would collapse.

The takeover was agreed in August, when a group of investors led by MCR Hotels offered $9 per share to take Soho House private, valuing the business at $1.8 billion. The consortium agreed to acquire the shares not already held by four major shareholders, who chose to roll over their existing stakes.

Those rolling over include Nick Jones, who owns around 6 per cent of the business, restaurateur Richard Caring, and Goldman Sachs Alternatives, which is also committing additional capital. Actor-turned-investor Ashton Kutcher is also part of the investor group.

Founded 30 years ago, Soho House has expanded to 46 clubs worldwide but has struggled as a listed business since floating in New York in 2021 at $14 a share. The stock has fallen close to 30 per cent over five years, reflecting tougher economic conditions and investor concerns that the brand’s once-distinctive sense of exclusivity had begun to erode.

With funding now secured, the company said it intends to proceed to completion, marking the end of a volatile chapter as a public company and a return to private ownership.