26 Capital Acquisition Corp, a special purpose acquisition company (SPAC) listed on the Nasdaq stock market in the United States, has announced what it termed as “liquidation”. The move follows an adverse court ruling regarding a merger deal with the operator of the Okada Manila casino resort, located in the Philippine capital, that would involve the listing on Nasdaq of the merged entity.
A U.S. court in Delaware ruled on September 7 that Okada Manila’s parent company, Japanese conglomerate Universal Entertainment Corp, did not have to complete the merger.
In a press release on Thursday, 26 Capital announced that it would “be unable to complete” the “business combination” with the Universal Entertainment within a previously agreed time frame due to the court’s decision.
26 Capital “intends to liquidate” a trust account related to the merger deal “effective as of the close of business on September 21”, it said.
The firm stated it expected that the operator of the Nasdaq stock exchange would, in turn, link up with the U.S. Securities and Exchange Commission to delist 26 Capital’s securities.
In its latest press release, 26 Capital said it was still “committed to vigorously pursuing all available remedies” against the Universal Entertainment side, “including damages”.
The court ruling said 26 Capital was entitled to seek damages. It stated: “If the SPAC proves breach, and if the defendants fail to establish their affirmative defences, and if the SPAC properly supports a sum of causally related damages, then the SPAC may be able to recover [damages].”
It was announced in February that 26 Capital was suing Tiger Resort, Leisure and Entertainment Inc – the promoter of the Okada Manila casino resort – and other Universal Entertainment subsidiaries, urging the prompt consummation of a previously-announced merger between the two sides.
Universal Entertainment later said, in July this year, it had eventually decided to end the deal on June 30.
The Japanese side had argued there had been “various material breaches of the merger agreement” by 26 Capital, and alleged “fraudulent conduct” by 26 Capital. The latter firm had reputedly said that such allegations were in its view “meritless”.
When the merger deal agreement was first announced in October 2021, the transaction implied an enterprise value for Okada Manila of US$2.6 billion.
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