The October 2021 agreement between Tokyo-based Universal Entertainment Corporation and 26 Capital Acquisition Corporation based in Miami, which would have seen the iconic Okada Manila casino resort listed on New York’s Nasdaq stock market, eventually resulted in a legal battle.
The original deal sought a merger between Tiger Resorts Asia – the main Philippine-based subsidiary of Universal – and the special-purpose acquisition company (SPAC) 26 Capital Acquisition, with the deal set to allow the Okada Manila casino resort to be listed on the Nasdaq stock market. At the time, the enterprise value for Okada Manila was established at $2.6 billion, and the original deal involved a $275-million worth of cash injection.
According to the wording of the press release issued by the two companies in October 2021, the transaction was expected to be finalized in the first six months of 2022.
However, the scheduled merger crashed in April 2022. At the time, the Supreme Court of the Philippines issued an order that billionaire Kazuo Okada – the controversial former owner of both Tiger Resorts and Universal Entertainment – must be restored to his executive role at the venue, a which he served before a major 2017 scandal. As previously reported by CasinoGamesPro, Mr. Okada’s agents used force to temporarily seize control of the Okada Manila resort from the end of May to early September 2022.
During the three-month occupation, the CEO and Chairman of 26 Capital Acquisition Jason Ader made several public statements in support of Universal Entertainment.
Unversal Entertainment Terminates October 2021 Merger Agreement and Takes the Matter to Court
In September 2022, Universal Entertainment managed to seize back control of the casino resort with the help of the Philippine National Police. At the time, the way for the agreed merger seemed clear to proceed and Okada Manila to finally get the planned Nasdaq listing. Unfortunately, months passed with no actual movement forward.
In February 2023, the rumors that the planned action failed turned out to be true, with 26 Capital Acquisition filing a lawsuit against Universal Entertainment in the state of Delaware. The legal action alleged that the Tokyo-based company was unreasonably slowing down the merger’s progress. The litigation starts today.
So far, Universal Entertainment had not revealed much about its own position in the dispute with 26 Capital Acquisition. The company’s public silence, however, ended dramatically at the end of June, as the Japanese company issued an official statement announcing the termination of its October 2021 merger agreement with 26 Capital Acquisition. In the statement, the firm explained that it came to the consideration that 26 Capital Acquisition made material violations of the merger agreement and participated in fraudulent misconduct, including making several misstatements and disclosure of confidential information.
Allegedly, the Miami-based company has provided Calabrese Consulting, an accounting firm that advises SPACs, with unauthorized confidential data.
Apart from that, Universal Entertainment claims that Jason Ader, CEO and Chair of 26 Capital Acquisition, gave interviews to news outlets in late 2022 without getting their consent and that he had unveiled information about the merger on his Twitter account. The company also claims that Mr. Ader pursued a campaign to bring the planned merger to an end at all costs, even in violation of US securities laws.
On the other hand, 26 Capital Acquisition believes that Tiger Resorts and its affiliates have taken part in repeated contractual violations to avoid the deal’s closure. The company claims that Universal Entertainment’s termination notice is groundless.