Soho House Private Deal Collapses as Key Investor Withdraws Funding Commitment

A significant obstacle has emerged in the ambitious plan to take Soho House private. Yucaipa, the investment vehicle controlled by billionaire Ron Burkle, announced on Thursday that MCR Hotels, a cornerstone investor in the proposed transaction, would be unable to meet its multimillion-dollar equity commitment by the expected closing date. The development threatens the viability of an $1.8 billion acquisition that would remove the London-based members’ club from public markets.

Soho House shares declined sharply on the news, closing down 9.6 percent at $8.11 on Thursday. The stock has tracked downwards consistently since the company’s flotation on the New York stock exchange in 2021 at $14 per share, representing a cumulative loss of approximately 40 percent for shareholders who invested at the initial offering price.

The consortium led by New York-based MCR Hotels had agreed in August to acquire Soho House at $9 per share, valuing the enterprise at roughly $1.8 billion. MCR’s chief executive, Tyler Morse, was positioned to join the board as vice-chairman as part of the transaction structure. The hotel group, which operates the High Line in New York and owns the BT Tower in central London, represented a critical pillar of investor support for the take-private proposal.

Existing shareholders have committed to rolling over their stakes in the deal. Ron Burkle’s Yucaipa retains significant influence as the controlling shareholder; founder Nick Jones has pledged to maintain his 6 percent holding. Additional stakeholders including restaurateur Richard Caring, whose portfolio encompasses The Ivy Collection, Scott’s and Sexy Fish establishments, have also agreed to participate. Ashton Kutcher and Apollo Global Management are providing equity and debt financing for the transaction.

Soho House’s board stated in a regulatory filing that both Yucaipa and the independent special committee formed to evaluate the offer are engaged in discussions with MCR affiliates and alternative parties to secure replacement funding. The company acknowledges, however, that success cannot be assured and that numerous uncertainties persist regarding the transaction’s completion.

Notwithstanding MCR’s withdrawal, Soho House intends to proceed with scheduling a shareholder vote on the merger proposal for Friday. The outcome of that ballot will provide clarity regarding investor sentiment toward the take-private plan and the board’s negotiating position in discussions with MCR and potential alternative investors.