Soho House (NYSE:SHCO) saw its shares drop about 12% in pre-market trading on Thursday after disclosing that MCR Hospitality Fund will be unable to fully meet its $200 million funding commitment tied to the group’s proposed sale.
The company said MCR Hospitality Fund IV LP and QP LP have notified Soho House that they cannot provide the full equity contribution originally expected to finance payments to shareholders under the merger agreement by the anticipated closing date.
Following the notification, Yucaipa and Soho House’s Special Committee said they are actively exploring alternative financing options in an effort to complete the transaction.
Despite the setback, Soho House confirmed that it still plans to hold its special shareholder meeting on Friday, January 9. The company added that all parties remain committed to closing the merger as soon as the remaining conditions are satisfied.
The $200 million equity commitment was a central element of the merger structure, as it was specifically intended to fund cash payments to shareholders as part of the deal.