https://www.wsj.com/articles/golden-nuggets-parent-tries-to-halt-proposed-deal-but-spac-says-no-11638473087
Golden Nugget's Parent Tries to Halt Proposed Deal, but SPAC Says No
Fast Acquisition rejects Fertitta's move, claims holding company didn't meet a documents deadline
Fertitta's holdings include the Golden Nugget casino in Atlantic City, N.J.
Photo: Wayne Parry/Associated Press
Kimberly Chin
@MsKimberlyChin
kimberly.chin@wsj.com
Updated Dec. 2, 2021 2:57 pm ET
Golden Nugget parent Fertitta Entertainment Inc. wants out of its SPAC deal, but the acquirer is rejecting the move.
Fertitta said in a letter this week that it plans to terminate its proposed merger with special-purpose-acquisition company Fast Acquisition Corp., on the basis that the agreement didn't close by Dec. 1, the deal's termination date.
On Thursday, Fast Acquisition rejected Fertitta's move to end the deal, adding that the company is bound by its obligations under the agreement. The SPAC said Fertitta delayed providing the required financial documents in time, thereby setting back the deal's closure process.
"Both sides and all counsel fulfilled all obligations to try and close this transaction before the walk away date," Fertitta said in an emailed statement, adding that it received regulatory approval too late to close the deal on time.
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Fertitta is a holding company for Golden Nugget casinos and Landry's restaurants, and is owned by billionaire Tilman Fertitta. It announced plans to go public by combining with Fast in February, citing opportunities in the post-pandemic hospitality and online-gambling sector with the accelerated legalization of online and land-based gambling.
The deal includes five Golden Nugget LLC-branded land-based casinos in the U.S. and the Landry's LLC portfolio of restaurants, which includes Del Frisco's Double Eagle Steakhouse, Landry's Seafood House and Bubba Gump Shrimp Co., and nearly half of the shares outstanding in the online-casino platform Golden Nugget Online Gaming Inc. GNOG -3.98% At the time, the deal was valued at roughly $6.6 billion including debt.
The digital-gambling division went public through a SPAC deal struck in 2020. In August, DraftKings Inc. agreed to buy the online-casino platform, extending the sports-betting operator's online-casino games offering to a broader consumer base with a well-known brand. Fertitta said ending its merger agreement with Fast wouldn't affect the DraftKings transaction.
In June, the company expanded the Fast deal to include a few more restaurants and entertainment assets. The consideration for Fertitta was also boosted from $1.97 billion to roughly $3.84 billion.
Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn't worth the risk. Illustration: Zoë Soriano/WSJ
Also known as blank-check companies, SPACs raise money before they develop a business. They use the proceeds to make an acquisition, usually within a couple of years, that converts the target into a public company.
SPACs have raised more than $150 billion this year, nearly doubling last year's then-record total, according to SPAC Research.
Many SPAC deals have been terminated or restructured in recent months with share prices falling and investor withdrawals surging. Such withdrawals occur when investors pull out their money from the blank-check company before a deal goes through. Low share prices often encourage withdrawals, which can leave the company going public with much less cash than expected and make it harder for it to meet its growth targets.
The average SPAC has lost about 60% of its money since the end of July before its deal goes through, up from roughly 25% in the first seven months of the year, SPAC Research data show.
Write to Kimberly Chin at kimberly.chin@wsj.com
Appeared in the December 3, 2021, print edition as 'Golden Nugget Operator Wants To Scrap Pact to List With SPAC.'
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