Amid an ongoing ownership rift between founder Kazuo Okada and Universal Entertainment, Okada Manila and Jason Ader’s special purpose acquisition company (SPAC) 26 Capital Acquisition Corp. (NASDAQ:ADER) are delaying previously announced merger plans by a year.
The news emerged just over two weeks after Ader said he believed his blank-check firm and the Philippine integrated resort operator could consummate the transaction before the end of this year, ultimately resulting in a Nasdaq listing for the gaming company.
Per the terms of an amendment signed today (Sept. 30), UE Resorts International (UERI) and 26 Capital have both agreed to extend the date on which either party could terminate the transaction contemplated in the Agreement from October 1, 2022 until October 1, 2023,” according to a statement.
It’s been nearly a year since the SPAC and Okada Manila, the world’s only Japanese-owned integrated resort, announced merger plans in a deal valuing the casino operator at $2.6 billion. However, the transaction has been hamstrung Kazuo Okada’s often forceful efforts, which included a brief physical takeover of the hotel earlier this year, to reclaim his spot at the company.
Okada, 80, and several counterparts today were charged by the Philippines Department of Justice with “grave coercion.”
Extension Different Cancellation
For ADER investors, it’s important to note that the SPAC isn’t dropping its bid to bring Okada Manila. In fact, the blank-check company reiterated its commitment to the transaction.
“The extension of the termination date illustrates the commitment on the part of both parties to successfully close the merger transaction contemplated by the Agreement. The amendment will provide additional time to complete the transaction. Both parties remain dedicated to working to close the transaction as expeditiously as possible,” according to the statement.
Those comments are relevant because the gaming/SPAC landscape recently turned into a minefield. European lottery giant Allwyn Entertainment and SPAC Cohn Robbins Holdings (NYSE: CRHC) halted merger plans, as just one example of the blank-check thaw in the wagering industry.
Additionally, Tekkorp Digital Acquisition (NASDAQ: TEKK) could dissolve if a unit of Playtech it’s working with can’t procure a mobile sports betting license in Illinois.
“I remain extremely excited about this transaction and the opportunity for our investors to participate in one of the fastest growing Asian gaming markets,” said Jason Ader, Chairman and Chief Executive Officer of 26 Capital, in the statement. “That fact that Universal Entertainment is willing to exteend the agreement by a year demonstrates the dedication of both parties to complete the merger.”
Okada Manila Outlook
Assuming Okada Manila ultimately lists on Nasdaq, it could be an interesting gaming equity play. To start, it will be the only publicly traded company in the industry that owns just a single venue.
However, that figure could grow over time as Ader previously noted the company could evaluate expansion opportunities in Japan and New York.
Okada Manila also offers investors potential benefits by way of being located in one of the fastest-growing gaming markets in the Asia-Pacific region and one that doesn’t have to answer to Beijing as does Macau.
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