US SPAC to pursue Okada Manila deal despite management disputes at Philippine Casino Resort
26 Capital Acquisition Corp., the Miami-based special purpose acquisition company (SPAC) controlled by investor Jason Ader, aims to complete its merger with Okada Manila this month and list one of the largest Philippines casinos later this year despite the ongoing fracas. on property management.
“I am fully committed to this agreement,” said Ader, president and founder of SPAC. Forbes Asia via videoconference from its headquarters in Miami on June 9. Under the deal announced in October, Tokyo-listed Universal Entertainment Corp. will inject Okada Manila into 26 Capital in return for an 88% stake in the combined entity dubbed Universal Entertainment Resorts Inc. (UERI) which will be listed on the Nasdaq, in a deal valuing the Philippine gaming company at $2.6 billion.
The transaction will be submitted to the vote of 26 Capital shareholders on June 28. Once approved, Ader said Okada Manila will list on Nasdaq under the symbol UERI. 26 Capital, which is investing $275 million in UERI, is pushing ahead with the acquisition despite the ongoing fight between billionaire Kazuo Okada – founder of Universal Entertainment in Japan – and his son Tomohiro Okada over the management of the Filipino property.
“I have every indication that the deal will be approved” by 26 Capital shareholders on June 28, Ader said. While Ader aims to complete the merger and listing by the end of the month, Tokyo-based Universal Entertainment said in a regulatory filing on Friday that it plans to delay closing the deal until September 30. , subject to an amended agreement with 26 Capital.
The delay will give Universal Entertainment some time to regain management control of Okada Manila after a group of people representing Kazuo Okada took control of the property on May 31, enforcing a standstill order issued. by the Supreme Court to reinstate Okada and his representatives to the board of directors of Tiger Resort and Leisure Entertainment Inc. (TRLEI) – the operator of the casino.
Okada founded Universal Entertainment in 1969 as a manufacturer of pachinko machines and casino equipment. However, he was ousted from the boards of the Japanese company and Okada Manila in 2017 amid allegations of embezzlement from the Philippine company. A Philippine court cleared Okada of the charges in December.
“It’s a fluid situation,” Ader said. “Our lawyers are closely monitoring developments. We are moving forward with the plan to close the deal. We’re not going to let Kazuo Okada disrupt the biggest listing of a Filipino company on the New York Stock Exchange or Nasdaq.
Universal Entertainment and TRLEI had asked the Supreme Court of the Philippines to overturn last month’s takeover of the property by Kazuo Okada and his business partner tycoon Antonio Cojuangco.
“Prior to the takeover, we were optimistic about the company’s growth following the post-pandemic recovery,” Michiaki Satate, ousted chairman of TRLEI’s board, said at a press conference in Manila on May 6. June. “While we continue our desire to keep the business afloat, Okada’s future is now uncertain.
Okada Manila said in January that total revenue increased 24% to $399.6 million in 2021 from a year earlier, supported by strong gaming revenue, particularly in the fourth quarter, as well as contributions from its retail, entertainment and restaurant outlets. Universal Entertainment said separately in February that the Philippine-owned property reduced its operating loss to 1.87 billion yen ($16.3 million) last year from a loss of 9 billion yen in 2020.
Despite the ongoing shareholder dispute, Okada Manila said occupancy rates at his hotel were well over 90% on weekdays and even higher on weekends.
“With the property’s operations in full swing and buzzing, Chairman Kazuo Okada expects to maintain the positive gains Okada Manila has made so far,” the company said in a June 10 statement. The group representing Kazuo Okada did not respond to Forbes AsiaUniversal Entertainment and 26 Capital’s request for comment to proceed with Okada Manila’s proposed Nasdaq listing.
With a development budget of $3.3 billion, Okada Manila has gradually opened up and currently operates nearly 35,000 square meters of gaming space with 599 gaming tables and 4,263 electronic gaming machines. When fully completed, the casino will have 974 gaming tables and 6,890 electronic gaming machines. It will also include two towers with 993 hotel rooms, a commercial boulevard with more than 50 shops, a Cove Manila nightclub and indoor beach club, more than 25 restaurants and one of the world’s largest multicolored musical and dancing fountains. .