 Bloomberg -- Gateway Casinos Entertainment Ltd., one of Canadas largest casino operators, failed in its bid to merge with Leisure Acquisition Corp. when the U.S. firm decided to scrap the deal.New York-based Leisure announced plans in December to merge into a subsidiary of Gateways parent in what the two companies described as a 1.1 billion transaction, including debt. Gateway has properties in British Columbia, Alberta and Ontario.The deal was initially set to close by April, but the deadline was extended after the coronavirus pandemic forced the gaming company to shut down its casinos. Leisure, a special-purpose acquisition company, must find a business to take over by Dec. 1 or return its cash to shareholders, it said in a filing with the Securities and Exchange Commission Thursday.Gateway, backed by private equity firm Catalyst Capital Group Inc., had long sought to sell shares. The Burnaby, British Columbia-based company filed for a U.S. initial public offering in November 2018, expecting to raise about C400 million 295 million and valuing the company at as much as C2.5 billion, a person familiar with the matter said at the time. Gateway withdrew its IPO registration last December and pursued the Leisure deal instead.Negatively InfluencedIt is unfortunate that the LACQ shareholder vote in March, at the peak of the global Covid pandemic, negatively influenced their ability to complete a transaction that was favorable to all the parties involved, Dan Gagnier, a spokesman for Catalyst, said in an emailed statement. Regardless, Gateway is an exceptional franchise and has been successful in building its business across Canada, creating long-term value for its various stakeholders.Catalyst specializes in buying the debt of troubled companies -- an area founder Newton Glassman once described as a blood sport. The private equity firm is among a group of creditors that inked a deal with Cirque du Soleil Entertainment Group to acquire substantially all of its assets in exchange for the cancellation of existing debt.Cirque is scheduled to present the new restructuring plan, which also includes as much as 375 million in new capital, to a Quebec court on Friday.In May, Catalyst told investors that assets in one of its oldest active funds declined in value by more than 60 last year. Catalyst Fund Limited Partnership IIIs stake at Gateway was marked down to about 130 million at the end of December, according to a document seen by Bloomberg.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.2020 Bloomberg L.P. 