The lawsuit was filed on February 2 in the Delaware Court of Chancery and calls for the prompt consummation of the merger, which was initially agreed upon in October 2021.
Universal Entertainment to Review Lawsuit Amidst Merger Extension
The ultimate parent company of Okada Manila, Japan’s Universal Entertainment Corp, has stated that they will carefully review the details of the lawsuit and respond appropriately.
The proposed merger would result in UE Resorts International Inc (UERI) becoming a publicly traded company on the NASDAQ, with the Hong Kong-based company that owns 99.9% of Okada Manila retaining a majority of 80% of the share capital. The total equity value of the newly formed SPAC company was estimated to be $2.5 billion according to the original merger agreement.
In October 2022, 26 Capital and UERI announced a 12-month extension to the deadline for the merger, pushing it from October 1, 2022, to October 1, 2023. This was done to ensure that both parties have enough time to properly deal with any issues that may arise during the merger process.
The filing of this lawsuit is a significant development in the ongoing merger negotiations and it remains to be seen how the Delaware Court of Chancery will respond. However, with the dedication of both parties to complete the merger, a resolution will likely be reached in the near future.
Delay Caused by Okada Manila Forceful Occupation
The extension to the deadline for the merger was put in place after a group representing the deposed founder of Okada Manila, Kazuo Okada, forcibly took control of the property.
On May 31, 2022, Kazuo Okada made his way onto the venue accompanied by 50 police officers and armed with a status quo ante order from the Philippines Supreme Court. According to Okada and his entourage, the order mandated the reinstatement of the casino resort’s board of directors to its 2017 composition, which included Okada as a member. Thus, the group ousted the Tiger Resort, Leisure and Entertainment Inc (TRLEI) board and declared themselves as the company’s executives.
TRLEI’s primary owner, Tiger Resort Asia Limited (TRAL), which holds a 99% stake in the company, promptly challenged Okada’s actions by filing motion for clarification. Meanwhile, Universal Entertainment, the parent company of TRAL, took action as well. The CEO, Jun Fujimoto, asked the Supreme Court to cancel the status quo ante order.
Eventually, PAGCOR was compelled to issue a directive for Okada and his associates to surrender the Okada Manila Casino Resort to its rightful owners. TRLEI regained control on September 2, 2022. In the end, Kazuo Okada was arrested on charges of grave coercion and remains in detention by the Philippine authorities.