SPAC deal for Okada Manila listing ended, says Universal Ent

Jul 03, 2023 Newsdesk Latest News, Philippines, Top of the deck  

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Japanese conglomerate Universal Entertainment Corp says it has ended a deal with United States-listed 26 Capital Acquisition Corp that would involve the listing in the U.S. of the operator of the Okada Manila casino resort in the Philippine capital. The two sides had been involved in a legal battle in the U.S. over the listing matter since February this year.

“In connection with the lawsuit, [the Universal Entertainment side has] resolved the termination of the merger agreement”, said the Japanese firm in a filing on Friday. It added that the decision was effective immediately.

The 26 Capital entity is a special purpose acquisition company (SPAC) listed on the Nasdaq stock market in the U.S.

Justifying its decision, Universal Entertainment said in its latest filing that, “in addition to the various material breaches of the merger agreement” and alleged “fraudulent conduct” by 26 Capital, the Japanese firm had been informed on June 15 that a firm called Rimu Capital Ltd had filed a lawsuit against 26 Capital’s representative, Jason Ader and others in the Southern District Court of New York, U.S., for the cancellation of US$25 million worth of 26 Capital stock transactions by Rimu Capital, fraud and violations of the Investment Advisers Act, etcetera.”

The Japanese firm added: “Thus, the [Universal Entertainment side] resolved to call off the listing… on the Nasdaq market in the U.S. with 26 Capital as a partner”.

Universal Entertainment had unveiled in October 2021 a merger agreement involving 26 Capital, which would result in Okada Manila becoming a publicly traded company listed on Nasdaq.

The merger and subsequent listing operation was initially expected to be completed by the end of June 2022. Completion was delayed several times, against the backdrop of what Universal Entertainment claimed was an “illegal” occupation between May 31 to September 2, 2022 of Okada Manila, when people acting on behalf of the resort’s ousted founder, Kazuo Okada, first occupied and then ran the property.

Universal Entertainment and 26 Capital eventually changed the deadline of the merger agreement to September 30, 2023.

However, 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 three other Universal Entertainment subsidiaries, urging the prompt consummation of the previously-announced merger between the two sides.

In March, Universal Entertainment filed a document to court denying the accusations made against the group in the suit by 26 Capital. At the time, it was also said that the Universal Entertainment side would seek to have the deal with the 26 Capital entity called off.

The court case is being heard by a court in the U.S. state of Delaware.

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