Soho House & Co., the global membership platform, announced a significant development that sent its shares soaring: a third-party consortium offered to acquire the company at a premium well above its current market value. This news ignited investor enthusiasm, propelling the stock to record highs.
The consortium’s bid of $9 per share represents an impressive 83% premium over Soho House’s closing price on Wednesday. In response to the offer, shares surged 47% to close at $7.22, marking the stock’s most substantial single-day gain and reaching its highest point in nearly a year. This dramatic price movement underscores the market’s positive reaction to the potential acquisition.
Driving this potential transaction is Ron Burkle, Soho House’s Executive Chair and controlling shareholder, along with The Yucaipa Companies, his private equity firm. Burkle has been advocating for a move to take the company private throughout the year, particularly as Soho House’s stock has struggled since its 2021 initial public offering. The proposed deal hinges on major shareholders, including Burkle and Yucaipa, reinvesting their equity in Soho House as part of the transaction.
In response to the offer, Soho House’s board has established an independent special committee to thoroughly evaluate the proposal. The company emphasized that there’s no guarantee this evaluation will lead to a strategic shift or transaction. Furthermore, Soho House stated it doesn’t anticipate releasing further public statements unless a transaction or alternative is approved, or the review process concludes.
Coinciding with this announcement, Soho House also released its third-quarter financial results. The company reported revenue of $333.4 million, nearly matching the average analyst estimate of $334 million. Currently, Bloomberg data indicates that Soho House holds four buy ratings, two hold ratings, and no sell ratings from analysts.
Founded in London in 1995 as a members-only club, Soho House has experienced significant global expansion. The company’s distinctive venues are often located in historically or architecturally significant buildings around the world. A prime example is its Paris location, housed in a 19th-century building that was once home to the family of renowned poet and artist Jean Cocteau.
In conclusion, the buyout offer for Soho House & Co. represents a pivotal moment for the company. The significant premium offered reflects the underlying value of the membership platform and its potential for future growth. While the outcome remains uncertain, the market’s enthusiastic response and the involvement of key stakeholders suggest a strong possibility of a transformative transaction. The independent committee’s evaluation will be crucial in determining the next chapter for Soho House & Co.
