MCR Fails To Put Up $200M To Take Soho House Private
The $2.7B deal that was supposed to take the Soho House private hit a snag after MCR Hotels, the deal's lead equity partner, notified that it couldn’t follow through on its $200M commitment.
Now, Yucaipa Cos., which controls the members-only club, is trying to fill the gap.
MCR, which agreed to help take Soho House private in August in partnership with Apollo Global Management and a group of investors, said this week that it wouldn’t be able to fund its closing commitment in full by the anticipated closing date, according to a Securities and Exchange Commission report Soho House filed Thursday.
The merger was supposed to close at the end of 2025, but now Yucaipa, the private equity firm of Soho House Executive Chairman Ron Burkle, is still working to come up with additional cash to complete the deal. MCR is involved in those talks, according to the filing.
“While numerous options are being pursued, there can be no assurance that such efforts will be successful,” Soho House said in the SEC filing.
Following the announcement, shares in Soho House, which trade on the New York Stock Exchange, fell 17%.
Soho House, which has properties in Miami, Los Angeles, Chicago, Portland and Austin, didn’t respond to a request for comment. MCR, which owns 150 hotels and operates 25,000 hotel rooms in 37 states, also didn’t respond to a request for comment.
MCR and its CEO, Tyler Morse, agreed to buy outstanding Soho House shares not held by shareholders for $9 apiece, which is an 83% premium to the stock's price when the take-private deal was first disclosed in December 2024.
The company is proceeding with a scheduled Friday shareholder vote on the merger, according to the filing.
As part of the deal announced in August, Apollo is providing debt and equity financing, and a group of investors, led by former That ‘70s Show star and technology investor Ashton Kutcher, agreed to put new equity into Soho House. Kutcher and Morse were expected to join the company’s board.
Burkle would retain majority control following the transaction, and Apollo Global Management would provide financing support.
Goldman Sachs Alternatives, which has invested in Soho House since 2021, committed to providing additional capital. Soho House founder Nick Jones, Goldman and British investor Richard Caring planned to roll over the majority of their stock into the private company as part of the deal.
