Golden Nugget parent company pays $33m settlement to cancel merger with SPAC

Fertitta Entertainment, Golden Nugget’s parent company, and the special purpose acquisition company (SPAC) Fast Acquisition Corp have mutually agreed to terminate their planned merger.

This comes after the two companies agreed on terms for a merger in February that would have allowed Fertitta, who owns Golden Nugget and the Landry’s restaurant chain, to go public on the Nasdaq stock exchange.

Golden Nugget and Fast scrap merger plans

On Friday, the companies announced that they agreed to mutually terminate their merger agreement, originally entered into on 1 February 2021 and amended on 30 June 2021. 

According to the announcement “the parties have simultaneously terminated their merger agreement after a settlement was reached regarding the parties’ disagreement over the termination date in the merger agreement”.

As a result, Fertitta will pay Fast and its shareholders a $33m settlement in a “combination of upfront and deferred payments.” Some of the payments will be contingent on whether Fast can agree on a merger with another business.

Doug Jacob, Founder of FAST said: “Fertitta Entertainment is an incredible hospitality empire run by the one of the world’s best operators that we have had a first-hand view into for many years now. We wish Tilman and his team the best of luck as they remain a private company. Through this settlement we ensured that we are sufficiently capitalized to seek a new target and that we could continue our efforts to maximize value for our shareholders.”

The SPAC started trading on the Nasdaq on 16 October 2020, and as a result, the firm must complete a merger by 16 October 2022 or it will be forced to stop trading and redeem all of its shares.

Tilman Fertitta added: “I have a lot of respect for the FAST team and will support them however I can as they continue to search for a merger target. At the end of the day we ultimately determined that the right decision for my company was to remain private at this time, and I look forward to continuing to grow our business both organically and in-organically.”

How did the companies get here?

Back in February, the two businesses agreed on a merger that would see Golden Nugget merge with the SPAC in order to go public on the Nasdaq exchange.

At that time, the deal was expected to close in the second half of 2021, with a deadline for either party to call off the agreement being set for 1 November. 

However, this deadline was later pushed back to 1 December. This was when Fertitta announced plans to cancel the combination. At the time, the SPAC responded by claiming that Fertitta Entertainment did not have the ability to cancel the deal.

The SPAC noted that Fertitta had not provided its financial statement until July, rather than the 31 March deadline to do so.

The SPAC cited a clause of the merger which stated: “the right to terminate this agreement […] shall not be available to any party hereto whose action or failure to fulfil any obligation […] shall have been the primary cause of the failure” to close the deal by 1 December.

Fast then said the late delivery of these statements was “unquestionably the primary cause” of the failure to complete the merger.

What about Golden Nugget Online Gaming?

Fertitta Entertainment previously owned Golden Nugget Online Gaming (GNOG), the former online-focused subsidiary of Golden Nugget.

However, the online operation was spun off through a merger with another SPAC called Landcadia Holdings II. 

Earlier this year, DraftKings announced plans to acquire GNOG in a deal worth $1.56bn. The purchase would see DraftKings secure access to Golden Nugget’s land-based business’ customer database, along with Tilman Fertitta joining the online betting giant’s board.

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