Soho House, the celebrity-studded members-only club where Prince Harry, Meghan Markle and Lady Gaga sip cocktails, is going private in a $2.7 billion deal, the company said Monday.
Hotel giant MCR Hotels is leading the takeover, offering $9 a share for Soho House’s outstanding stock — a 17.8% premium over Friday’s $7.60 close.
Soho shares shot up 15.5%, to $8.82, in early trading on Monday after the company’s announcement.
Actor and tech investor Ashton Kutcher will join Soho’s board following the deal, and hospitality veteran Neil Thomson will succeed Thomas Allen as chief financial officer effective immediately, according to Reuters.
Billionaire Ron Burkle, the controlling shareholder since 2012, will roll his majority stake into the new company, alongside other insiders, according to the Wall Street Journal.
Apollo Global Management is pumping in more than $700 million in equity and debt financing to seal the deal.
Apollo, the alternative asset manager with more than $840 billion in assets under management as of June, released a statement confirming its role in the deal.
Hedge fund activist Dan Loeb, who in January disclosed a nearly 10% stake and initially blasted the $9-a-share offer as one that shortchanged investors, said he is pleased with the planned move and supports the deal.
“As both a shareholder and Soho House member, I support this transaction and am pleased to see management of the club in good hands,” Loeb told Reuters.
For shareholders, the offer values the global club empire at roughly $2.8 billion, not including debt — a steep drop from its $14-a-share public debut in 2021.
Founded in London in 1995 and crossing the Atlantic with a New York outpost in 2003, Soho House built its mystique on exclusivity and celebrity cachet.
The Manhattan club even gained legendary status after an episode of “Sex and the City” showed Sarah Jessica Parker’s character Carrie Bradshaw getting turned away at its door.
Membership now tops 200,000 across 46 locations worldwide, with fees running into the thousands. Younger applicants pay less, and the dress code famously discourages suits and ties. Some artists have even bartered their work for entry.
But rapid expansion has eroded some of the brand’s allure. Members gripe about service delays, and snagging a poolside reservation in Manhattan or Brooklyn has become a cutthroat affair.
Executives counter that exclusivity can be preserved by opening new locations, not packing in more people at existing ones.
The company reported a 91.5% retention rate in 2023, with membership revenue climbing nearly 16% year-over-year to $118.6 million in the second quarter. It has posted three straight quarters of profit.
The stock has seesawed since the IPO, reflecting what insiders call the “lumpy” nature of the business.
MCR Hotels, which controls 30,000 guest rooms nationwide, has been bulking up with high-profile properties such as the Royalton near Times Square and the Gramercy Park Hotel.
It owns the TWA Hotel at JFK Airport and last year bought London’s BT Tower for conversion into a hotel.
The Post has sought comment from Soho House, MCR Hotels, Burkle and Loeb.
Going private will let Soho House dodge quarterly earnings scrutiny and focus on long-term growth.
Several other members-only haunts have popped up in the Big Apple since Soho House’s debut, including Zero Bond, which counts Mayor Eric Adams among its regulars.
San Vicente Bungalows requires members to cover their phone cameras. Casa Cipriani and chef Jean-Georges Vongerichten have opened swanky spaces of their own.
