Universal Entertainment Group is looking for a US-based special purpose acquisition company (SPAC) to partner with to list the Okada Manila integrated resort business on the Nasdaq or New York Stock Exchange (NYSE).
The Japanese company declared its intentions to work with a blank-check entity with an eye toward a listing on a US bourse in a note to investors last week. Universal’s integrated resort operation consists solely of the venue in the Philippine capitol city.
The Company has already executed advisory agreements with multiple financial advisory firms in Japan and the US in order to prepare for the listing of its IR Business … and is currently engaged in the selection of a SPAC, the investigation of aspects involving the law and tax systems, and the revision of the capital structure of the Company Group as a whole, with the aim of listing the business sometime in fiscal 2021,” according to the investor letter.
Universal Entertainment started partial operations at Okada Manila in December 2016, noting that over time, growth is steady. As is the case with gaming properties around the world, the venue was hampered by the coronavirus pandemic. But the Japanese company said it deployed a variety of cost-cutting measures to bolster earnings, many of which are expected to remain permanent.
Let SPAC Speculation Commence
After 244 blank-check companies raised $78.2 billion via initial public offerings last year, another 134 billion raised $39 billion (as of Feb. 12) to start 2021.
In other words, there are hundreds of SPACs currently trading that do not yet have merger partners. That group includes dozens that previously declared intentions to focus on gaming assets. Blank-check companies have two years to strike deals or face forced liquidation in which capital is returned to shareholders.
In the investor letter, Universal Entertainment doesn’t reveal the identities of specific SPACs it’s in talks with. But the gaming company makes clear it views this an efficient avenue to list its equity on one of the major US exchanges.
“In view of this situation, [and] having positioned its IR Business as the core business of the Company Group, the Company recently arrived at the decision to pursue a detailed examination of the listing of that business on either the US NASDAQ Stock Exchange or the New York Stock Exchange, with the aim of realizing the further expansion of that business and greater corporate group value,” according to the letter.
SPAC Fever Permeates Gaming Sector…Again
Not even two months into 2021, and there are already multiple blank-check deals notched with gaming companies. These include Golden Nugget operator Fertitta Entertainment with FAST Acquisition (NYSE:FST) and Acies Acquisition Corp. (NASDAQ:ACAC) with Playstudios. That follows three gaming firms that went public last December following SPAC mergers.
That group doesn’t include some new public entities born out of blank-check transactions that aren’t dedicated gaming companies, but have some or are looking to gain exposure to the industry.
As for SPACs without a deal that make for logical partners for Okada Manila, some stand out more than others. Universal Entertainment didn’t mention a date when it would reveal its partner.