Soho House rejects takeover offer to take company private

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Soho House rejects takeover offer to take company private

Related tags Soho house group Private members club Soho house

Soho House has rejected a takeover offer that would have seen it go private because it undervalued the members club group.

As first reported by The Telegraph​, the New York-listed company said on Friday (31 May) that it had rebuffed an offer by an unnamed party despite it being at a ‘substantial premium’ to its current market cap.

It comes after Soho House announced earlier this year that an internal special committee was assessing options for the business including a deal to go private.

In an update to investors regarding the takeover offer, Soho House said: “The special committee concluded that the offer did not adequately reflect the value of the Company and was not in the best interests of its public stockholders.”

Soho House, which operates 42 members clubs worldwide, has faced a turbulent few months.

Back in February, the group was forced to hit back at claims made in a short seller report by GlassHouse Research, which accused the member club operator of being ‘a company with a broken business model and terrible accounting’​.

The report, entitled Soho House & Co: A company facing an existential crisis​, went on to criticise the group for a ‘persistent lack of profitability’, issues with ‘overcrowding’, and a ‘perceived decline in service quality’.

At the time, Soho House said it ‘fundamentally rejected’ the report and claimed GlassHouse’s intention was to drive down the company’s stock price for its own benefit.

In March the group reported a loss of $118m (£93m) for the year ended 31 December 2023 off a total revenue of £1.1bn​, an improvement on the $221m it lost from a revenue of $972m in 2022.

Membership revenues increased 32.5% year-over-year to $361.5m, while in-house revenues grew 13% to $482.1m.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) rose from $61m to $128m, which CEO Andrew Carnie at the time said reflected the group’s ‘continued focus on driving a better member experience’.

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