FAST Acquisition is a blank-check business that agreed to merge with Tilman Fertitta’s Fertitta Entertainment in February. However, the Texas billionaire and owner of the Golden Nugget casino brand is trying to break that deal. This could be the beginning of a legal dispute.
Fertitta Balks at SPAC
In February, the parent companies of the Golden Nugget and SPAC reached a $6.6-billion deal. The entertainment company could once again become a publicly-traded entity with this agreement.
The value of the deal increased to $8.6 billion when other Landry’s-tied restaurants were added in July. Landry’s holds more than 500 restaurants within the Morton’s, Chart Houses, Del Frisco’s, or Chart House brands. FAST also signed an agreement to acquire Catch restaurant, including Catch Steak. Fertitta already owns 50% of Catch.
From then on, things were quiet regarding this marriage of convenience. This led SPAC experts and observers to ask why it was taking so many months to finalize the transaction. Wednesday brought a significant change when Fertitta’s attorney sent FAST a note describing plans for the termination of the merger. The letter explained that the merger was still not complete.
FAST Balks at Fertitta
Fertitta’s casino and restaurant empire is pointing fingers toward FAST. The shell company, however, insists it isn’t their fault the transaction didn’t go through. It was actually Fertitta Entertainment that is to blame. The shell company claimed that Fertitta failed to provide required financial statements.
According to a FAST regulator filing, the statements made by Fertitta “are unquestionably the primary cause of the failure of the Closing to occur by the Termination Date, and, as such, FEI continues to be bound to its obligations under the Merger Agreement in all respects.”
The SPAC claims that the financial documentation in question didn’t arrive until July, well beyond the March 31 due date. FAST believes it could suffer irreparable injury if the deal is not reached and that it will bring suit if necessary.
“The Company further stated that it intends to take all necessary steps to protect itself and its investors,” the filing said.
SPACs have just two years to either find a merger partner or risk liquidation. FAST went public as of August 2020. Fertitta explains the blank-check agreement situation. FAST was not a factor in Golden Nugget Online Gaming being acquired by DraftKings in a $1.56-billion all-share takeover announced in August.
SPACs Don’t Always Work Out
SPAC deals can sometimes fail or be terminated. Wynn Resorts pulled the plug last month in its plans to take Wynn Interactive public via a merger with Austerlitz Acquisition Corporation I. That deal had previously been announced in May.
There are many questions regarding the possibility of Fertitta Entertainment going public in the absence of a deal with FAST.
Late last year, rumors surfaced that Fertitta may be interested in returning Golden Nugget/Landry’s operations to the public marketplaces. The rumors also suggested that a traditional initial private offering (IPO) would not be possible due to weaknesses in the restaurant business and the company’s $4 million in debt.