Private members’ club operator Soho House is set to go private in a $2.7 billion takeover led by hotel investor MCR, ending a turbulent three-year run on public markets.The deal values Soho at $9 a share, a 17.8% premium to its last close, and sent shares up 15.5% in early trading Monday.
Actor and investor Ashton Kutcher will join the board, while Neil Thomson takes over as chief financial officer.Founder Nick Jones and Executive Chairman Ron Burkle’s Yucaipa firm will retain majority control, owning about three-quarters of the business.
The deal comes after years of financial struggles despite membership and revenue growth.Soho began its existence as a creative center in London during 1995 before it expanded to Europe and North America and Asia but its fast growth raised doubts about preserving its exclusive nature.
Third Point hedge fund manager Daniel Loeb, who holds nearly 10% of Soho and pushed for a sale, said he supports the deal.Apollo Global Management will provide hybrid capital financing, reportedly exceeding $700 million.
The analysts believe that Kutcher’s star power alone will not be enough for Soho to succeed outside of public markets; Soho will need to control costs and make its premium appeal more attractive to succeed outside of public markets.
