Soho House Shares Skyrocket 47% Following $2 Billion Takeover Bid
Staff Editor Exclusive Social Club Soho House Receives $2 Billion Takeover Offer
Soho House, the renowned members-only social club, has become the subject of a significant takeover bid, with shares surging over 47% following the announcement. The company received a nearly $2 billion offer from an undisclosed “new third-party consortium,” priced at $9 per share—an 83% premium over the closing price on December 18.
The takeover offer has garnered support from Ron Burkle, Soho House’s billionaire chairman. However, for the deal to proceed, major shareholders, including Burkle himself, would need to roll over their equity stakes. An independent special committee has been formed to evaluate the proposal.
Since going public in 2021, Soho House has faced challenges in achieving profitability. The company’s market capitalization has declined to $1.4 billion from its initial $2.8 billion valuation. Despite reporting a 13.6% increase in revenue to $333.4 million for the quarter ending September 29, net income was a mere $200,000.
Soho House has revised its revenue guidance for the year to $1.2 billion, with adjusted EBITDA at $140 million, both figures falling below previous projections. The company also carries a substantial debt load of $686 million.
In response to these financial pressures, Soho House has implemented strategic measures, including corporate staff reductions. However, the company has expanded its accounting team by 50% due to previous financial statement errors. Despite these challenges, Soho House continues its expansion plans, recently opening Mews House in London and preparing for a new club in New York.
CEO Andrew Carnie emphasized during an earnings call that the special committee’s assessment of the takeover offer may not necessarily result in a change in strategy or lead to a transaction, underscoring the uncertainty surrounding the company’s future direction.
As Soho House navigates this potential turning point, industry observers and members alike will be closely watching the developments of this high-profile takeover bid.
