GGRAsia – Universal Ent says appeal likely regarding SPAC merger ruling

Universal Ent says appeal likely regarding SPAC merger ruling

Sep 11, 2023 Newsdesk Latest News, Philippines, Top of the deck

Japanese conglomerate Universal Entertainment Corp said in a Friday filing that there will “likely be an appeal” by United States-listed 26 Capital Acquisition Corp regarding a ruling by a U.S. court on the merger between 26 Capital and the entity overseeing the Okada Manila casino resort in the Philippines. The latter is controlled by Universal Entertainment.

In a ruling the day before, a court in Delaware said the Japanese group would not need to go ahead with a merger agreement with 26 Capital in a deal that would involve the listing in the U.S. of the operator of the Okada Manila resort (pictured in a file photo).

The judge, vice chancellor Travis Laster, ruled on Thursday that “multiple factors” lead to the decision, according to the court ruling document, seen by GGRAsia.

The decision not to order the merger completion was in part because 26 Capital “engaged in conduct that should not be rewarded”, said the judge.

The judge stated that 26 Capital – a special purpose acquisition company (SPAC) listed on the Nasdaq stock market – was still entitled to seek damages. He added he would address that matter at a later date, according to the document.

“For the purposes of the opinion, the court reserved judgment on a finding of breach until after the damages trial to be held in future,” stated Universal Entertainment in Friday’s filing.

In February, 26 Capital sued Tiger Resort, Leisure and Entertainment Inc – the promoter of Okada Manila – and other Universal Entertainment subsidiaries, urging the prompt consummation of a previously-announced merger between the two sides.

Universal Entertainment said in July that it had eventually decided to end the deal on June 30.

In Friday’s filing, Universal Entertainment noted that the court denied 26 Capital’s request because of a number of reasons.

These included the fact that the “complexity of completing the transaction and supervising the subsidiaries’ obligations made ordering specific performance unfeasible”.

The court “noted the challenges of enforcing the order of specific performance against a Japanese company group operating a casino in the Philippines,” added Universal Entertainment.

The Japanese firm stated that it would “continue to assert the legitimacy” of its claims regarding the lawsuit.