Home Finance Golden Nugget pays $33m to SPAC parent for cancellation of merger

Golden Nugget pays $33m to SPAC parent for cancellation of merger

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Golden Nugget’s parent company Fertitta Entertainment has agreed with Fast Acquisition Corp, a special-purpose acquisition firm that is based in Los Angeles to end their merger after agreeing on a settlement of $33m. (PS25.0m/EUR29.2m).

The two companies agreed to a merger in February that would allow Fertitta – owner of the Landry’s and Golden Nugget restaurant chains – to be listed on Nasdaq.

The deal, at the time, was to be closed in the second quarter of 2021. A deadline had been set for 1 November, by which either party could terminate the contract. Later, this deadline was pushed to the 1st of December.

Fertitta Entertainment notified Fast on that date that they planned to end the partnership.

The SPAC replied by saying that Fertitta Entertainment was not able to cancel the agreement.

Fast pointed out that Fertitta did not provide its financial reports by the deadline of 31 March, but rather in July.

The article cited the clause in the merger agreement which stated that “the right of termination of this agreement […] will not be available for any party who has failed to fulfill any obligations […] as the main cause” of failure to complete the deal before 1 December.

SPAC stated that the “unquestionably primary” cause of failure of this merger was the late delivery.

The businesses have announced today (10th December) that they “have simultaneously terminated the merger agreement following a settlement regarding the parties’ disagreements over the termination dates in the merger contract”.

Fertitta has agreed to pay Fast’s shareholders and Fast a settlement of $33m in a “combination upfront payments and deferred payment”. These deferred payment are dependent on Fast’s ability to execute a merger with another company.

Tilman Fertitta, the chief executive of Fertitta Entertainment, said that his company decided it was better to stay private than go public.

He said: “I respect the Fast team, and I will continue to support them as they search for merger targets.” He said, “At this point in time we decided that it was best for our company to stay private. I am looking forward to growing both organically as well as inorganically.”

Fast’s founder Doug Jacob stated that the agreement should allow Fast to pursue another merger. It began trading on Nasdaq 16 October 2020. This means that the business must either complete a merge by 16 Oct 2022, or cease trading.

Jacob stated, “Fertitta Entertainment has been an amazing hospitality empire that is run by one of the best operators in the world. We have seen it first hand for years.” We wish Tilman’s team all the luck they can get as they continue to be a privately owned company.

Through this settlement, we were able to ensure that we had sufficient capital to pursue a new acquisition and continue to work to maximize shareholder value.

Fertitta Entertainment owned Golden Nugget Online Gaming, which was at that time the igaming division of Golden Nugget. This business, however, was spun-off through its own SPAC merger with Landcadia Holdings II.

Tilman Ferritta joined the board of the operator earlier this year. Through the deal, DraftKings acquired GNOG, a land-based gambling business, for $1.56bn.

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