Billionaire businessman Tilman Fertitta is attempting to pull out of an $8.6 billion blank-check deal to take Fertitta Entertainment, his restaurant and casino company, public. The move, highly criticized by special purpose acquisition company (SPAC) Fast Acquisition Corp., could lead to legal action. Fertitta Entertainment owns the Golden Nugget casinos brand, as well as Landry’s seafood chain and Morton’s steakhouses, among others.
Fertitta’s hospitality and entertainment empire’s planned merger with the SPAC has been in development since February. In a letter on Wednesday to Fast, Fertitta Entertainment said that it was now choosing to terminate the agreement after the parties failed to close the deal by the termination date, reports Houston Chronicle.
In a letter responding to Fertitta’s decision, Fast Acquisition Corp. accused the Houston-based company of “material breach.” The special purpose acquisition company also stated it planned to bring the matter to court.
The SPAC argues Fertitta Entertainment has failed to deliver financial statements in a timely fashion, and that its actions were “unquestionably” the primary cause of the failure of the closing. According to Fast, Fertitta hadn’t provided financial statements until July, which were due no later than March 31.
“Accordingly, the purported notice is invalid, unenforceable, of no legal force and effect and is hereby rejected,” Fast Acquisition’s chief financial officer, Garrett Schreiber, said in its response letter, reports Bloomberg.
The response also claims Fertitta’s decision will cause Fast “irreparable injury.” The SPAC intends to take all necessary steps to protect the business: “You are hereby placed on notice of breach and that should your breach not be immediately remedied, we intend to initiate litigation.” As a result of the controversy, Fast’s shares have now fallen 4.9% to $10.11.
In a statement to Bloomberg on Thursday, Fertitta’s company fired back, saying that the agreement reached with the SPAC allowed either party to end the deal should it not close by December 1.
The company further claims both sides tried to fulfill their respective obligations, but regulatory approval didn’t come until November 24, which made it impossible to close on time. Thus, Fertitta Entertainment said it believes “it was in its best interest” to elect to exercise its termination right under the merger agreement.
Fertitta’s company also discussed the pending sale of its Golden Nugget Online Gaming subsidiary to sports betting giant DraftKings. According to the firm, the termination of the merger won’t affect these plans. The deal, which valued Golden Nugget’s online arm at $1.56 billion, was first announced in August and is set to close early next year.