The US-based Special Purpose Acquisition Company (SPAC) that has been planning a merger with the operating entities of Philippines integrated resort Okada Manila has filed a lawsuit against those entities claiming they have breached their obligations under their original merger agreement.
According to details posted by Japan’s Universal Entertainment Corp – the ultimate parent company of Okada Manila – on Tuesday, SPAC firm 26 Capital Acquisition Corp filed the lawsuit in the Delaware Court of Chancery on 2 February against Universal subsidiaries Tiger Resort Asia Ltd (TRAL), Tiger Resort, Leisure and Entertainment Ltd (TRLEI), UE Resorts International Inc (UERI) and Project Tiger Merger Sub Inc.
The lawsuit alleges 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.
Universal said it plans to scrutinize the details of the suit and “properly deal with it”.
Implementation of the lawsuit comes after UERI and 26 Capital announced in October a 12-month extension to the merger deadline from 1 October 2022 until 1 October 2023.
The proposed merger, initially unveiled in October 2021, would see UERI become a publicly traded company on the NASDAQ, with (TRA) – the Hong Kong-registered company that owns 99.9% of Okada Manila operator TRLEI – to retain around 80% of the share capital.
The original merger agreement, signed in October 2021, puts the total equity value of the newly formed SPAC company at US$2.5 billion.
The extension to the original termination deadline was put in place after a group representing deposed Okada Manila founder Kazuo Okada forcibly took control of the property in May 2022. The Okada group maintained physical control for three months before the TRA-backed board regained control in September following a directive from Philippines gaming regulator PAGCOR.
26 Capital Corp Chairman and CEO Jason Ader said at the time, “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.”
