Soho House Returns to Private Ownership in $2.7 Billion Deal
In This Article
HIGHLIGHTS
- Soho House has been acquired for $2.7 billion by a consortium including Ashton Kutcher, marking a return to private ownership.
- MCR Hotels, the third-largest hotel group in the US, leads the investment, with Tyler Morse joining the board as vice-chair.
- The acquisition price of $9 per share represents an 18% premium over the last trading price but remains below its 2021 peak.
- Soho House, known for its celebrity clientele, has faced challenges maintaining exclusivity amid global expansion.
- Existing major shareholders, including founder Nick Jones and investor Ron Burkle, will retain their stakes.
Soho House, the renowned private members' club chain, is set to return to private ownership following a $2.7 billion acquisition by a consortium that includes Hollywood actor and investor Ashton Kutcher. The deal, led by MCR Hotels, marks a significant shift for the company, which has faced challenges since its public listing on the New York Stock Exchange in 2021.
A New Chapter for Soho House
Founded in 1995 by restaurateur Nick Jones, Soho House has grown from a single club in London's Soho district to a global network of 46 locations, attracting a celebrity clientele that includes the likes of Kate Moss and the Duke and Duchess of Sussex. Despite its popularity, the chain has struggled to maintain its aura of exclusivity amid rapid expansion, a challenge highlighted by its declining share price.
The acquisition, priced at $9 per share, offers a premium of 18% over the last trading price but remains below the $14.21 peak reached in August 2021. The deal includes $700 million of debt, bringing the enterprise value to approximately $2.7 billion.
Leadership and Investment
MCR Hotels, the third-largest hotel operator in the United States, will spearhead the investment. Tyler Morse, MCR's CEO, will join Soho House's board as vice-chair, alongside Ashton Kutcher. Existing shareholders, including Nick Jones, who holds a 5% stake, and US retail billionaire Ron Burkle, with a 40% stake, will retain their investments.
Morse expressed enthusiasm for the acquisition, stating, "We have long admired Soho House for bringing together cultures from around the world into a global network of 46 houses, and we look forward to the continued growth of that fabric."
Challenges and Opportunities
Soho House's expansion has included opening new locations in cities like Paris, Istanbul, and Bangkok, but this growth has come with the challenge of preserving the exclusivity expected by its 213,000 members. Membership fees can reach up to £2,920 annually, underscoring the premium nature of the club.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted that while the addition of a Hollywood star to the board is noteworthy, the chain will need more than celebrity appeal to secure its long-term future.
WHAT THIS MIGHT MEAN
The acquisition of Soho House by MCR Hotels and its consortium partners, including Ashton Kutcher, presents both challenges and opportunities. The return to private ownership may provide the flexibility needed to address the financial and operational hurdles that have plagued the company since its public listing. However, maintaining the delicate balance between global expansion and exclusivity will be crucial for sustaining its brand appeal.
The involvement of high-profile investors like Kutcher could enhance Soho House's visibility and attract new members, but the company will need to implement strategic changes to ensure profitability. As the hospitality industry continues to evolve, Soho House's ability to adapt and innovate will determine its success in this new chapter.
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Soho House Returns to Private Ownership in $2.7 Billion Deal
In This Article
Daniel Rivera| Published HIGHLIGHTS
- Soho House has been acquired for $2.7 billion by a consortium including Ashton Kutcher, marking a return to private ownership.
- MCR Hotels, the third-largest hotel group in the US, leads the investment, with Tyler Morse joining the board as vice-chair.
- The acquisition price of $9 per share represents an 18% premium over the last trading price but remains below its 2021 peak.
- Soho House, known for its celebrity clientele, has faced challenges maintaining exclusivity amid global expansion.
- Existing major shareholders, including founder Nick Jones and investor Ron Burkle, will retain their stakes.
Soho House, the renowned private members' club chain, is set to return to private ownership following a $2.7 billion acquisition by a consortium that includes Hollywood actor and investor Ashton Kutcher. The deal, led by MCR Hotels, marks a significant shift for the company, which has faced challenges since its public listing on the New York Stock Exchange in 2021.
A New Chapter for Soho House
Founded in 1995 by restaurateur Nick Jones, Soho House has grown from a single club in London's Soho district to a global network of 46 locations, attracting a celebrity clientele that includes the likes of Kate Moss and the Duke and Duchess of Sussex. Despite its popularity, the chain has struggled to maintain its aura of exclusivity amid rapid expansion, a challenge highlighted by its declining share price.
The acquisition, priced at $9 per share, offers a premium of 18% over the last trading price but remains below the $14.21 peak reached in August 2021. The deal includes $700 million of debt, bringing the enterprise value to approximately $2.7 billion.
Leadership and Investment
MCR Hotels, the third-largest hotel operator in the United States, will spearhead the investment. Tyler Morse, MCR's CEO, will join Soho House's board as vice-chair, alongside Ashton Kutcher. Existing shareholders, including Nick Jones, who holds a 5% stake, and US retail billionaire Ron Burkle, with a 40% stake, will retain their investments.
Morse expressed enthusiasm for the acquisition, stating, "We have long admired Soho House for bringing together cultures from around the world into a global network of 46 houses, and we look forward to the continued growth of that fabric."
Challenges and Opportunities
Soho House's expansion has included opening new locations in cities like Paris, Istanbul, and Bangkok, but this growth has come with the challenge of preserving the exclusivity expected by its 213,000 members. Membership fees can reach up to £2,920 annually, underscoring the premium nature of the club.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted that while the addition of a Hollywood star to the board is noteworthy, the chain will need more than celebrity appeal to secure its long-term future.
WHAT THIS MIGHT MEAN
The acquisition of Soho House by MCR Hotels and its consortium partners, including Ashton Kutcher, presents both challenges and opportunities. The return to private ownership may provide the flexibility needed to address the financial and operational hurdles that have plagued the company since its public listing. However, maintaining the delicate balance between global expansion and exclusivity will be crucial for sustaining its brand appeal.
The involvement of high-profile investors like Kutcher could enhance Soho House's visibility and attract new members, but the company will need to implement strategic changes to ensure profitability. As the hospitality industry continues to evolve, Soho House's ability to adapt and innovate will determine its success in this new chapter.
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