Soho House Jumps On Receiving Acquisition Offer With 83% Premium

Soho House & Co Inc. SHCO shares are trading higher after the company received a $9.00 per share acquisition offer from a new third-party consortium, an 83% premium to the December 18, 2024, closing price.

Supported by the company’s Executive Chairman, Ron Burkle and The Yucaipa Companies, the offer follows a strategic review by Yucaipa and its advisors, aiming to better reflect the company’s inherent value.

In response to the offer, which is contingent on key shareholders rolling over their equity interests, the Board of Directors has established an independent Special Committee to evaluate the proposal.

Also, the company reported third-quarter EPS of $0.00 beating the street view of a loss of $0.01 and sales of $333.4 million missing the consensus of $334.87 million.

Membership revenues rose 16.7% year-over-year to $107.4 million in the quarter.

In the third quarter, total members increased 4.8% year-over-year to 267,494, and Soho House members grew 13% year-over-year to 208,078.

The membership waitlist remains at a record level of approximately 111,000.

At the end of the third-quarter of 2024, Soho House had cash and cash equivalents, including restricted cash, of $147 million.

During the quarter, the company repurchased approximately 2.3 million shares for $13 million.

Outlook: Soho House updated its FY24 revenue guidance to around $1.2 billion (vs. the consensus estimate of $1.23 billion), narrowing from its previous range of $1.2 billion to $1.25 billion.

Price Action: SHCO shares are up 58.4% at $7.77 at the last check Thursday.

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