Soho House Buyout at Risk: MCR Fails to Secure $200M

The $2.7 billion agreement to take Soho House and Co. private, announced in August 2025, is facing uncertainty after MCR Hotels informed stakeholders that it may not be able to meet its equity funding obligation.

MCR Hotels, the lead investor in the transaction and a New York-based operator with more than 150 properties, said it could not fund its planned $200 million equity commitment by the expected closing date.

Equity shortfall and SEC disclosure

The $200 million commitment represented the purchase of approximately 22 million shares at $9 per share.

Following MCR’s notification, Soho House filed a disclosure with the SEC on January 8 stating that it is seeking alternative financing options to keep the transaction on track. Without replacement capital, the deal risks being delayed or terminated.

Deal structure and valuation

The transaction values Soho House at an enterprise value of $2.7 billion, representing a 17.8 percent premium to the company’s $7.64 per share closing price prior to the announcement.

Under the original structure, MCR would acquire publicly traded shares, while controlling shareholder Yucaipa Companies, led by Executive Chairman Ron Burkle, would roll their equity and retain majority ownership along with founder Nick Jones.

Governance and investor lineup

The deal also included governance changes, with MCR CEO Tyler Morse set to become vice chairman of the board, as well as actor and investor Ashton Kutcher joining the board.

Financing for the transaction is anchored by Apollo Global Management, which committed hybrid debt and equity capital. Goldman Sachs Alternatives is also supporting the deal and is expected to provide additional funding.

However, MCR’s funding shortfall creates a significant gap that must be filled by new investors for the go-private transaction to proceed.

Photo by Tomek Baginski on Unsplash