Universal Entertainment and other entities linked to Okada Manila are trying to cancel the merger with Capital Acquisition Corp. Still, the development stage company of Jason Ader is planning on proceeding with the deal as initially intended.
Apart from trying to terminate the deal, Universal Entertainment is seeking compensation for legal expenses and fees, as well as any financial losses that may have occurred from the potentially canceled transaction, from 26 Capital.
A few days ago, Japan-based Universal Entertainment issued a new regulatory filing listing June 30th as the termination date of a merger agreement that the two parties originally reached in October 2021. The parent company of Okada Manila has cited some material violations of the merger agreement, as well as fraudulent conduct by 26 Capital as the main reasons for its decision to cancel the contract.
The company has used its recent regulatory filing to extend what has been a hostile stretch between Jason Ader’s special-purpose acquisition company (SPAC) and the gambling operator. In March 2023, Universal Entertainment and related affiliates brought 26 Capital to court. At the time, it alleged that the black-check company was intentionally hurrying the conclusion of the merger. It also claimed that the special-purpose acquisition company may have breached securities laws.
After the lawsuit was filed against it in the Delaware Court of Chancery, 26 Capital responded to the move by describing the legal action as a “desperate” gambit by Universal Entertainment to distract the attention of the competent authorities by making them look away from its own improper conduct throughout the two companies’ merger talks.
SPAC Refuses to Take Universal’s Deal Termination Notice
The special-purpose acquisition company of Jason Ader is not taking the termination notice of Universal Entertainment just like that. In a separate statement, the company confirmed that it had received the termination notice and called the move “baseless”.
According to 26 Capital, Tiger Resorts and its affiliates have taken part in repeated contractual violations to avoid closing, with the closure being the subject of pending litigation in Delaware court that is set to go to trial on July 10th, 2023. The company refers to the public docket for the litigation on the allegations linked to Tiger Resorts. As mentioned above, 26 Capital believes that these allegations are groundless. The company further noted that it remains fully committed to the completion of the planned acquisition deal and improving the corporate governance of the merged entity.
In the filing about the termination of the deal, Universal Entertainment mentioned legal action that was filed against 26 Capital by Rimu Capital, a US-based money manager, as another reason for seeking cancellation of the planned merger deal. The Japanese company explained that the cancellation of the stock transactions worth $25 million by Rimu Capital was a major setback, along with alleged violations and fraud of the Investment Advisors Act.
Universal Entertainment and its affiliates also claim that Jason Ader made misleading statements to public investors about Okada Manila’s state of affairs in an effort to mitigate shareholders’ concerns. The parent company of the popular integrated casino resort noted that it did not provide Ader with any permission to make those claims.
