Letter to Soho House & Co Inc. Shareholders from Executive Chairman of the Board - Seite 2

I’ve debated for some time whether Soho House should be a public company.

To be honest the biggest argument I have with myself (it’s not solely my decision and many other opinions matter) is that I’ve never had shareholders lose money with me from an IPO of a company I control.

My personal belief in the value being created at Soho House is so strong that I’d rather just be patient, but my investing style shouldn’t be imposed onto others.

Over time we’ve had inquiries about taking the company private. As we reported, the Board formed a special committee to review any transaction that would require me to be part of the future of the company.

To be clear, I want to and intend to be an owner for the long haul, but at this time I’m not part of a group and haven’t made a bid (although I’m not prohibited).

We were shocked Friday when it came to my attention that certain information from the special committee process had been leaked. Neither the broader Board nor management have been part of the special committee process, making this potential leak particularly concerning to us, and warranted this statement.

To be clear, I’m not part of any bid at this time, but any proposal that may be on the table requires me to roll my shares. Hence the current need for a special committee.

In layman’s terms, the process is that the independent special committee is advised by their bankers and lawyers as to the appropriateness and the fairness of any proposal. Then I have to agree to contribute my shares at that value. Then the independent Board votes and then the minority shareholders vote, requiring a “majority of the minority.”

In summary there are a lot of checks and balances.

There has always been a lot of investor interest in Soho House, and now is no exception. It is one-of-a-kind. It’s not a hotel company and it’s not a food and beverage company. It’s a membership company with a lot of demand and very low attrition (which provides a large and growing base of recurring revenues in the multiple hundreds of millions).

The public market doesn’t seem to understand or fully appreciate the value of Soho House, and the interest from the special committee process has shown private buyers may be willing to step-up and close the gap. However, it’s not for me to opine on the fairness or the appropriate value of the company’s stock, especially if I am not intending to be a seller.