Integrated gaming resort Okada Manila is listing on the National Association of Securities Dealers Automated Quotations (Nasdaq) albeit through Miami-based “blank check” company 26 Capital Acquisition Corp., as part of a merger deal giving the local casino enterprise a value of $2.6 billion.
Tiger Resort, Leisure and Entertainment Inc., operating as Okada Manila, entered into a merger agreement with 26 Capital, a deal which is expected to channel to the gaming resort up to $275 million worth of fresh funds from the initial public offering of 26 Capital last January.
Okada Manila’s parent firm, Universal Entertainment Corp., will put in 100 percent of its equity in the transaction in exchange for 88 percent of the combined company, assuming there are no redemptions by shareholders of 26 Capital. This is subject to dilution if further capital is raised as part of the transaction prior to closing.
A “blank check” or special purpose acquisition company like 26 Capital is a shell company that is formed to raise funds from the capital market for the purpose of acquiring another company. After the merger, the target automatically becomes a publicly traded company via backdoor listing, or without having to go through the usual process of offering shares to the public.
The boards of directors of both parties have unanimously approved the proposed transaction, which is expected to be communicated in the first half of 2022. It is subject to approval by 26 Capital stockholders and other customary closing conditions.
In a press statement on Friday night, Okada Manila president Byron Yip said: “Okada Manila is at the heart of the gaming and hospitality business in Asia. We are fortunate to operate the most luxurious integrated resort in the Philippines, and excited to realize the full potential of this state-of-the-art facility for gaming, entertainment and hospitality as a public company and in partnership with Jason Ader of 26 Capital.”
Ader, chair and CEO of 26 Capital, said: “Okada Manila is the future of the gaming market in Asia and poised for tremendous growth.”
Ader of SpringOwl Asset Management has over 26 years of experience as an institutional investor, asset manager and research analyst, with particular expertise in the gaming and hospitality industries. SpringOwl has raised more than $1 billion in capital since it was founded in 2013.
Okada Manila, the only Japanese-owned and -operated casino in the world, is the largest (in terms of gross floor area and gaming floor area) in the Philippines and among the largest in the world. It sits on over 50 acres of prime waterfront real estate at the Philippine Amusement and Gaming Corporation Entertainment City along Manila Bay.
The resort currently has nearly 35,000 square meters of gaming space and the capacity to operate 599 gaming tables and 4,263 electronic gaming machines. Upon full completion of construction in 2022, Okada Manila will have a licensed capacity to operate 974 gaming tables and 6,890 electronic gaming machines.
The resort costs $3.3 billion to construct. It began to progressively open in 2019 following the completion of its first hotel tower.