Soho House secures funding for takeover deal

Soho House has successfully secured the necessary funding to complete a substantial takeover deal valued at $1.8 billion. The London-based company, which has faced challenging economic conditions since its listing, received new financing commitments from various backers. This includes $200 million in funding that will enable it to finalize the acquisition led by a consortium of investors, including MCR Hotels.

According to a recent stock exchange filing, Morse Ventures, owned by Tyler Morse, chief executive of MCR, will contribute a $50 million equity facility. MCR will also commit an additional $50 million in equity as part of its original agreement. This indicates a significant investment in the future of Soho House, known for its exclusive private members’ clubs.

Adjustments to the funding arrangements were made after it was reported that MCR would be unable to meet its multimillion-pound equity commitment by the anticipated closing date. This development led to a decline in shares, which dropped nearly 10 percent shortly thereafter.

Soho House has amended its debt commitments with private equity firm Apollo and Goldman Sachs, increasing its senior unsecured notes facility from $150 million to $220 million. This restructuring also reduced Apollo’s equity commitment from $50 million to $30 million.

Large shareholders have opted to roll over their equity, rather than accepting cash payouts, thereby lowering the overall capital required to complete the transaction. This move suggests a strong belief in the company’s long-term potential and the desirability of maintaining their investments.

Since its debut on the New York stock market in 2021, Soho House’s shares have decreased by approximately 30 percent, reflecting investor concerns over its ability to preserve the exclusive appeal it has historically cultivated.

This acquisition is seen as critical not only for the financial stability of Soho House but also for cementing its reputation as a leader in the members’ club sector.