Shares of Soho House (SHCO) jumped as much as 16% in early trading on Monday after news that the private members club operator is set to go private. This caps off a year of speculation that the company was set to leave public markets after its 2021 debut.
Soho House, which operates more than 40 members-only clubs worldwide, is set to be taken private by hotel operator giant MCR Hotels in a deal worth $2.7 billion that will pay out investors at $9 per share — a premium of nearly 18% over where the stock closed on Friday before news of the deal became public.
“This transaction reflects the strong confidence our existing and incoming shareholders have in the future of Soho House & Co., and the transformation we’ve led since becoming a public company,” CEO Andrew Carnie said in the press release announcing the deal. “Returning to private ownership enables us to build on this momentum, with the support of world class hospitality and investment partners.”
The deal comes after a year that saw rampant speculation that the company might go private, initially fueled by a short-seller report in February 2024 that argued the members club operator had a “broken business model and terrible accounting,” while facing “material headwinds regarding its viability as a public company.” The firm, GlassHouse Research, set a price target of $0 on the stock.
Soho House issued a statement two days after the report came out, saying it “contains factual inaccuracies, analytical errors, and false and misleading statements,” and announcing that the company was convening a special board committee to evaluate transactions, including a possible move to delist.
When the deal closes, MCR Hotels will take control of Soho House’s publicly traded stock. Founder Nick Jones and executive chairman Ron Burkle, who together own roughly a combined 75% of the company, according to Reuters, will retain a majority stake. Actor and investor Ashton Kutcher will join the board.
Private equity firm Apollo Global Management is providing financing for the transaction, according to the press release. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
The company initially went public in 2021 through its parent company, Membership Collective Group, raising $420 million on a price of $14 per share. Soho House also announced Monday morning that Neil Thompson, most recently the chief financial officer of Tasty Restaurant Group, will succeed Thomas Allen as CFO, effective immediately.
MCR Hotels owns a litany of other New York properties, including the Gramercy Park Hotel, the High Line Hotel, and JFK Airport’s TWA Hotel.
