What is the expected timeline for the investigation and any potential regulatory delays that could affect the closing of the transaction?

Investigation timeline & regulatory risk

The inquiry launched by former Louisiana Attorney General Charles Foti and Kahn Swick & Foti is a price‑adequacy/​process review, not a formal antitrust or SEC filing. In comparable “fair‑value” investigations, the lawyers typically request documents, interview senior management and then file a brief with the court or the Securities and Exchange Commission. That process usually takes 4‑6 weeks to complete a first‑round report, followed by a 30‑day response window for the target’s board. If no material deficiencies are found, the investigation can be closed in ≈ 8‑10 weeks from the start date.

However, the presence of a former state attorney general adds a layer of scrutiny that can trigger a formal SEC “proxy‑statement” review if the investigators deem the $9.00‑per‑share consideration insufficient. An SEC review of a merger‑type proxy can add 45‑60 days of regulatory hold time, and any request for additional information (a “no‑action” letter or “comment” letter) can push the closing further out by 2‑3 months. In practice, market participants should assume a minimum 2‑month delay and a potential 4‑month extension if the review escalates.

Trading implications

Given the uncertainty, the stock is likely to trade at a risk‑discount to the $9.00 cash tender. Expect the price to hover 5‑7 % below the offer until the investigation’s outcome is disclosed (look for a decisive filing with the SEC or a court order). Technicals show the share price is testing a $8.20‑$8.35 support zone; a break below $8.15 could signal the market pricing in a prolonged delay or a possible renegotiation of the price, while a bounce above $8.50 would suggest confidence that the review will close without material findings.

Actionable view:

- Short‑term: Maintain a cautious short or hedge (e.g., buy puts or sell futures) if the price slips below the $8.15 support, capturing the downside risk of a delayed or aborted closing.

- Medium‑term: If the stock stabilizes above $8.40 and no adverse filing appears within the next 3‑4 weeks, consider a scaled‑in long position to capture the “deal‑close premium” as the market re‑prices the likelihood of a smooth $9.00 cash distribution.

Monitoring the next SEC Form 8‑K filing from Soho House, any court docket entries from KSF, and the NYSE “MCR transaction” closing calendar will be critical to adjust the trade thesis.