Coming to a compromise

Golden Nugget owner Fertitta Entertainment is paying a settlement of $33m to put an end to a dispute regarding a merger agreement with a special purpose acquisition company (SPAC). The FAST Acquisition Corporation SPAC announced on December 10 that it has accepted the terms of the settlement.

FAST Acquisition will now look at other possible merger opportunities

The agreement includes a combination of upfront and deferred payments, with part of the payments conditional on FAST ultimately merging with another business. Following the ending of this relationship, FAST Acquisition will now look at other possible merger opportunities. Fertitta Entertainment is also covering all expenses associated with terminating the merger agreement.

FAST Acquisition is focusing on opportunities in the hospitality space. It raised $200m in August 2020 through an initial public offering (IPO) and is currently listed on the New York Stock Exchange (NYSE).

Wishing each other well

In the statement announcing this settlement, FAST Acquisition founder Doug Jacob acknowledged the high-quality nature of Fertitta Entertainment and wished the company’s founder and CEO Tilman Fertitta and his team the best of luck going into the future. Jacob said: “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.”

Tilman Fertitta spoke of his respect for FAST Acquisition and said that he will support the SPAC in any way possible as it looks for another merger target. Speaking about the reasons behind remaining a private company, Fertitta said: “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 inorganically.”

Origins of the merger agreement and dispute

Fertitta Entertainment initially revealed in February its plan to go public through a reverse merger with FAST Acquisition. The initial deal had a $6.6bn valuation, which rose to $8.6bn after Fertitta Entertainment added further assets to the deal during the summer.

While all looked rosy initially, the companies ultimately missed the December 1 termination date for the merger agreement. Fertitta Entertainment then sought termination of the deal, but FAST Acquisition claimed that Fertitta Entertainment was still bound to the agreement.

The SPAC claimed that Fertitta Entertainment was very late in delivering key documents, while Fertitta Entertainment blamed the failure of the merger on late approval from the SEC. The SPAC claimed that it would be pursuing legal action if Fertitta Entertainment did not comply with its demands.