Golden Nugget Parent Fertitta Entertainment to Go Public via SPAC

  • The new company will trade on the NYSE after merging with Fast Acquisition Corporation
  • The deal is expected to close in Q2 2021; both boards have approved the deal
  • The transaction implies a total business value of $6.6bn
  • Tilman Fertitta will hold a 60% stake in the new company
  • Fertitta plans to look at making significant gaming-related mergers and acquisitions
Golden Nugget casino in downtown Las Vegas
The parent company of Golden Nugget and Landry’s, Fertitta Entertainment, is going public through a merger with the SPAC, FAST Acquisition Corporation. [Image:]

Fertitta to retain controlling stake

Golden Nugget and Landry’s parent company Fertitta Entertainment is planning to go public on the New York Stock Exchange through the FAST Acquisition Corporation special purpose acquisition company (SPAC). The company’s new name will reportedly be Golden Nugget Entertainment.

Expectations are that the deal, announced February 1, will close in the second quarter of 2021, pending regulatory approval and other closing conditions. Both boards have unanimously approved the deal, with FAST shareholders still needing to give it the green light.

from 1993 to 2010, the company traded on the NYSE before Fertitta took it private

As a result of the merger, Tilman Fertitta will sell a minority stake to investors while keeping a 60% position in the company that will be worth about $2bn following the transaction. He will also remain as the company CEO, president, and chairman. From 1993 to 2010, the company traded on the NYSE before Fertitta took it private after acquiring all outstanding shares.

Other significant interests

Sandy Beall and Doug Jacob, both of whom have interests in the restaurant sector, founded FAST Acquisition Corporation. In sum, the merger implies a $6.6bn valuation on the Landry’s/Golden Nugget business.

FAST Acquisition currently has $200m in cash in trust after its IPO last August. An additional $1.2bn will come from institutional investors through private investment in public equity (PIPE). The plan is to use these funds to accelerate growth, reduce current debt, and cover general costs.

In addition to Fertitta’s 60% stake, the PIPE investors will control 35% of the new company, public stockholders will have access to 4%, while FAST Acquisition will get a 1% stake.

Speaking about the reasons for Fertitta Entertainment going public once more, Tilman Fertitta said: “I determined that in order to maximize the opportunities in the gaming, entertainment and hospitality sectors, it was preferable to take my company public.”

He went on to talk about how the company has been looking at going public since 2019, but the COVID-19 pandemic led to delays. Fertitta also noted that using a SPAC to go public will allow the company to get faster and more certain access to capital markets. Some aspects of Fertitta Entertainment will be separate from the merged company, remaining under the complete ownership of Tillman Fertitta. 

Future plans

Fertitta plans to focus on the gaming sector, in particular, following this acquisition. The increased availability of significant capital will help it to compete in buying other companies. A couple of years ago, Fertitta failed in an attempt to take over Caesars Entertainment, losing out to a bigger bid from Eldorado Resorts. Speaking about future plans, Fertitta said: “We’re looking to do some substantial (mergers and acquisitions) in gaming.” 

Following the reverse merger, Fertitta Entertainment will still have a controlling stake of about 31 million Golden Nugget Online Gaming shares. The online gaming division went public in December 2020 on the NASDAQ through a similar SPAC deal. 

Five land-based casinos using Golden Nugget branding in the United States will also be part of the newly public company. Landry’s is Fertitta’s restaurant empire that includes many hotels and restaurant brands like Bubba Gump Shrimp, Morton’s The Steakhouse, and Rainforest Cafe.

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