Missing the deadline
Golden Nugget’s parent company is facing a significant legal headache as it tries to get out of a planned merger with a special purpose acquisition company (SPAC). Fertitta Entertainment agreed in February to merge with the FAST Acquisition SPAC in a deal initially valued at $6.6bn.
As a result of this planned merger, Fertitta Entertainment would have become a publicly traded firm. After adding certain parts of Fertitta Entertainment’s Landry restaurant operations and some other conditions to the proposed merger in July, the value increased to $8.6bn.
the two parties missed the December 1 proposed termination date
Despite the apparent progress the merger was making, the two parties missed the December 1 proposed termination date. This led to Fertitta Entertainment sending a written notice on Wednesday to the SPAC outlining its plan to stop the merger proceedings. In its response on Thursday, FAST blamed the failure to complete the merger on Fertitta Entertainment and went on to state that Fertitta Entertainment is still bound to the SPAC merger.
Laying the blame on Fertitta Entertainment
The SPAC believes that Fertitta Entertainment’s notice to terminate the deal is “invalid, unenforceable, of no legal force and effect and is hereby rejected.” Therefore, FAST has called on Fertitta Entertainment to immediately withdraw the notice and to then take the necessary steps to fulfill the terms of the agreement. FAST said it will make any moves necessary to protect itself and investors as a result of Fertitta Entertainment’s alleged “material breach.” If Fertitta Entertainment does not comply with FAST’s demands, then the SPAC has said that it will begin litigation.
FAST highlighted Fertitta Entertainment’s late delivery of important financial documentation that was necessary for the deal to progress. The SPAC only received these documents in July, even though the original delivery date was supposed to be in March. Fertitta Entertainment stated on Thursday that both parties fulfilled their obligations to get the deal done, but that SEC approval only came on November 24. Therefore, the restaurant and casino company believes that this late approval “made it impossible” to close the merger deal by December 1.
Other potential issues
Golden Nugget Online Gaming, an offshoot of Fertitta Entertainment, is in the process of becoming part of DraftKings. The announcement of this acquisition came in August, with the deal reportedly worth $1.56bn. While it does not appear that the SPAC merger dispute will impact the acquisition, if litigation proceedings take place in the future, there could be some issues for the commercial agreement between Fertitta Entertainment and DraftKings.
DraftKings’ commercial agreement with Fertitta Entertainment covers an expanded retail sportsbook presence, marketing integrations, Houston Rockets sponsorship assets, and market access opportunities through Golden Nugget casinos. DraftKings is set to be the official iGaming, daily fantasy sports, and sports betting partner for the Rockets and will open a retail sportsbook in the team’s Toyota Center.
This is not the first time that a casino operator has had issues with a SPAC merger recently. Wynn Resorts announced its decision last month to no longer proceed with a SPAC merger for its online gambling division. Wynn Interactive was set to merge with the Austerlitz Acquisition Corporation SPAC and become publicly tradable.
The post Golden Nugget’s Parent Company Involved in $8.6bn SPAC Merger Dispute appeared first on Latest Online Gambling News.