SPAC Company 26 Capital Initiates Legal Action Against Okada Manila Subsidiaries for Failure to Accurately Fulfill Merger Obligations
On Thursday, February 2, 26 Capital Acquisition Corp., one of the US-based special purpose acquisition company (SPAC) and the most distant parent company of Okada Manila, filed legal action in a Delaware Court of Chancery against subsidiaries of one of Okada Manila’s operators, Universal Entertainment, alleging that “they have breached their obligations under their original merger agreement.”
These subsidiaries are: Tiger Resort Asia LTD (TRAL), Tiger Resort, Leisure and Entertainment Ltd (TRLEI), UE Resorts International Inc (UERI) and Project Tiger Merger Sub Inc.
26 Capital’s lawsuit:
The lawsuit was filed in a Delaware Court of Chancery seeking legal action against Universal Entertainment subsidiaries, following the public announcement in October by UE Resorts International Inc (UERI) and 26 Capital of a 12-month expansion to the merger deadline from October 1, 2022 to October 1, 2023.
26 Capital asserts: “The entities breached the obligation to consummate the merger promptly under the original merger agreement and calls on the court to order such consummation to take place promptly.”
Fully aware of the lawsuit against its subsidiaries, Universal officials said: “We plan to scrutinize the details of the suit and properly deal with it.”
Looking at the original merger agreement, which was first revealed in October 2021, UE Resorts International Inc must become a publicly traded company on the National Association of Securities Dealers Automated Quotations (NASDAQ) stock market together with Tiger Resort Asia LTD, a Hong Kong registered company that is the owner of 99.9% of the operator Tiger Resort, Leisure and Entertainment Ltd, to maintain nearly 80% of the share revenue.
However, the deal also sets the total equity value of the latest SPAC company, 26 Capital, at 2.5 billion US dollars.
As for the expansion of the original deadline for the merger, it was initially triggered after a group representing ousted Okada Manila founder Kazuo Okada violently regained control of the asset in May 2022.
But that didn’t last long; since in September a TRAL-supported board took control of the property following orders from the Philippine Amusement and Gaming Corporation (PAGCOR), better known as the Philippine gaming regulator.
Commenting on the expansion of the merger deadline, Jason Ader, Chairman and Chief Executive Officer of newly-formed 26 Capital, said: “I remain extremely excited about this transaction and the opportunity for our investors to participate in one of the fastest growing Asian gaming markets.
“The fact that Universal Entertainment is willing to extend the agreement by a year demonstrates the dedication of both parties to complete the merger.”
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