Shares in Soho House fell sharply after a key backer in a proposed $1.8bn deal to take the members’ club group private failed to deliver a crucial funding commitment, casting doubt over the future of the transaction.
The London-founded business confirmed that Yucaipa, the investment vehicle of billionaire executive chairman Ron Burkle, had been informed that MCR Hotels would be unable to provide its planned $200m equity contribution by the expected closing date.
MCR had been a cornerstone investor in the deal announced last summer, leading a consortium that agreed to pay $9 per share to acquire the outstanding stock not already held by existing major shareholders. Its withdrawal has now put the entire transaction at risk.
Soho House shares closed down 9.6 per cent at $8.11 on Thursday, extending a long period of underperformance since the group floated on the New York Stock Exchange in 2021 at $14 a share. The stock has lost roughly 40 per cent of its value since listing.
In a regulatory filing, Soho House said Yucaipa and the board’s independent special committee were “engaging with affiliates of MCR, as well as other parties”, in an attempt to secure replacement funding. However, it cautioned that “there can be no assurance that such efforts will be successful”.
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