FAST Acquisition Corp., the special purpose acquisition company, is fighting back with legal threats.
Billionaire Tilman Fertitta is attempting to back out of an $8.6 billion merger that would bring Fertitta Entertainment to the stock market.
In February, the company, which is the parent of the Golden Nugget casinos and restaurant conglomerate Landry's, announced that it planned to go public via a merger with FAST Acquisition Corp., a special purpose acquisition company. At the time, the transaction was valued at $6.6 billion, but the deal was amended in June to include Mastro’s Restaurants, Aquarium Restaurants, Vic and Anthony’s Steakhouse, Galveston Island Historic Pleasure Pier, and a handful of smaller restaurant concepts, adding a total of 42 incremental business assets.
However, according to an SEC document filed Wednesday, Fertitta Entertainment submitted written notice of its election to terminate the merger agreement because the transaction didn't close by the deadline of December 1 as stated in the contract.
“Both sides and all counsel fulfilled all obligations to try and close this transaction before the walk away date,” Fertitta said in an email to the Wall Street Journal.
FAST responded by stating the ability to terminate is not available to parties whose actions "have been the primary cause" of the deal not closing by or on the specified date. The company further noted that Fertitta failed to deliver certain financial statements until July, when they were due by March 31. FAST said this delay was "unquestionably the primary cause of the failure of the Closing to occur by the Termination Date."
"[Fertitta Entertainment's] material breach has and will cause irreparable injury, and we intend to take all necessary steps to protect the SPAC and its investors," FAST CFO Garrett Schreiber said in a statement. "You are hereby placed on notice of breach and that should your breach not be immediately remedied, we intend to initiate litigation."
A special purpose acquisition company (SPAC) is a shell corporation intended to raise capital through an IPO and merge with an existing entity. FAST, formed in August 2020, is led by co-CEOs Sandy Beall, the founder of Ruby Tuesday, and Doug Jacob, who helped launch &pizza. The chairman is Kevin Reddy, once CEO of Noodles & Company and COO of Chipotle.
BurgerFi is the most recent restaurant chain to use a SPAC to move into the public sphere. BurgerFi and OPES Acquisition Corp. agreed to merge in June 2020, with an anticipated initial enterprise value of approximately $143 million. The chain rung the Nasdaq bell later in December of last year.