Soho House Enters New Funding Agreement to Complete Privatization Deal
Soho House said it entered into a new funding commitment agreement - which will allow it to close a deal to go private - after its previous funding fell through, The Wall Street Journal's Katherine Hamilton reports. The members-only club said it had made multiple agreements to secure about $200M in alternative commitments. The commitments will allow for the company to close a deal announced in August for a group of investors led by MCR Hotels to acquire it, the author notes. The proposed transaction has an implied enterprise value of $2.7B, including debt, and would take Soho House private. Earlier in January, MCR, which is one of the biggest hotel owners in the U.S., said it couldn't fully fund its $200M equity commitment to acquire Soho House.
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- Funding Commitment Disclosure: Soho House announced approximately $200 million in alternative funding commitments, including a $50 million equity letter from Morse Ventures, leading to a 13% surge in post-market trading.
- Equity Commitment Details: MCR Investors informed Soho House of an additional $50 million equity commitment under the Original MCR Commitment, bringing the total equity commitments from Morse Ventures and MCR to $100 million, bolstering the financial backing for the merger.
- Market Reaction Analysis: Last Thursday, Soho House shares fell 10% after MCR Hospitality Fund indicated it could not fully meet its $200 million commitment, but the disclosure of this funding commitment alleviated market concerns regarding the funding gap.
- Acquisition Deal Background: In August, Soho House agreed to be acquired by an investor group led by MCR Hotels at a price of $9 per share, and this funding commitment is crucial for ensuring the successful completion of the transaction.

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