Soho House's $1.8 Billion Deal at Crossroads as MCR Hotels Pulls Back on Funding Pledge

The Acquisition Gamble Unravels

Soho House faces a critical moment as its $1.8 billion privatization deal hangs in the balance following MCR Hotels’ inability to deliver its $200 million funding commitment. The luxury hospitality brand, which operates 46 exclusive venues globally, saw its stock plummet over 13% to $7.80 as investors grapple with mounting uncertainty. MCR Hotels, the third-largest hotel operator in the United States overseeing properties like the iconic TWA Hotel at JFK and London’s BT Tower, has emerged as the primary obstacle to closing the acquisition originally spearheaded by a consortium including Apollo and Goldman Sachs.

What’s at Stake for Members Across Markets

The takeover stalled at a pivotal juncture for the members’ club, which had paused new applications across its flagship locations—London, New York, and Los Angeles—in response to capacity concerns. With Soho House reopening memberships this year and launching new venues including Soho Mews House and Soho Farmhouse Ibiza, the uncertainty surrounding ownership adds complexity to expansion strategy. The most recent quarter showed membership revenue hit $122.7 million, reflecting a robust 14% year-over-year surge, yet total debt exceeds $700 million, intensifying pressure to stabilize the transaction.

The Path Forward: January Vote and Investor Hunt

Management plans to proceed with a shareholder vote on January 9, banking on MCR’s consortium partners or fresh capital sources to bridge the funding gap. The original offer of $9 per share represented an 83% premium over prices at the time of announcement—a striking rebound from the $13.15 per-share peak when Ron Burkle’s investment vehicle took Soho House public on the New York Stock Exchange in July 2021. Founder Nick Jones, who established the brand three decades ago from a single Greek Street townhouse in Soho, retained plans to remain invested despite the acquisition complications.

Weighing Options in Uncertain Waters

Soho House has disclosed it’s evaluating multiple alternatives following MCR’s withdrawal, though executives cautioned against overconfidence in these parallel negotiations. Tyler Morse, MCR’s chief executive, had positioned the acquisition as a chance to “blend operational excellence with one of hospitality’s most celebrated brands.” With the January deadline approaching and no replacement funding secured, stakeholders across London and New York locations face mounting anxiety about whether this high-profile transaction will ultimately materialize.