Soho House has agreed to be bought by New York-based MCR hotels in a deal worth $2.7 billion.
Once the must-have membership chain for the world’s elite, Soho House lost some of its luster after over-expanding and floating on the public stock market in 2021.
From London to Mumbai, its locations have hosted celebrities including Prince Harry and Meghan Markle on their first date.
But in recent years, members — who pay just under $6,000 a year for access to all clubs — have complained that the brand has strayed from its artistic roots by opening locations in less inspiring areas such as Balham, London.
With more than 200,000 global members, questions of exclusivity have arisen, alongside complaints about overpacked pools and long waits at the bar.
The group has also come under pressure from short sellers — who bet against the stock of a company — and activist investors.
Last year, short sellers GlassHouse described Soho House as a ‘broken business model’ with ‘terrible accounting.’
Meanwhile, activist investor Third Point has spent months pushing the board to explore a deal that would boost its valuation.
Soho House has agreed to be bought by New York-based MCR hotels
The agreed upon deal with MCR Hotels and their investing partners agreed to pay $9 a share to investors, a premium on the $7.60 they were valued at in Friday trading.
That puts Soho house’s equity excluding debt at $1.8 billion, but with debt the group claims this raises its enterprise value to $2.7 billion.
Ron Burkle, the billionaire backer and longtime controlling shareholder, will roll over his stake into the new regime, the Financial Times reported.
After years of not turning a profit Soho House’s finances have begun to turn a corner.
The company’s latest quarterly results revealed a third straight quarter of profit and that its membership revenue had grown by 15.9 percent compared to the same time last year.
MCR Hotels is one of the largest hotel owners in the US, with more than 30,000 guest rooms among its properties.
It is best known for its 1960s-themed TWA Hotel at New York’s JFK Airport.
In the UK the group recently bought BT Tower, one of the most notable building’s on the city’s skyline, and is in the process of converting it into a hotel.
Harry and Meghan famously had their first date at Soho House in London
Ron Burkle, the billionaire backer and longtime controlling shareholder, will roll over his stake
A New York outpost famously featured on Sex and the City
The original Soho House on Greek Street in London
Earlier this year Soho House sued UK retail giant Next, alleging that it had ripped off the designs of its furniture.
Burkle has also run into trouble this summer with conservationists who say his plans to build a six-bedroom Cotswolds mansion in the UK is ‘out of proportion’.
The businessman hopes to construct a six-bedroom house which would have a gun room, lift, entertainment room and wine store, several reception rooms, a butler’s pantry and a domed entrance hall said to be inspired by the Pantheon in Rome.
The sprawling manor house would also feature a natural swimming pool, bather’s pavilion in the ‘pleasure ground’ area, stable block and estate manager’s cottage plus a circular lawn that may be a helipad.
But villagers have drawn battle lines against it and have been struggling for the best part of three years to have the scheme thrown out by West Oxfordshire District Council.
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