The sale of Canadian Gateway Casinos by Catalyst Capital Group to Leisure Acquisition Corp. of New York City has been delayed again.
First announced in December, the $1.5 billion transaction was due to close April 5 but was pushed back to June 30. Last month, Leisure Acquisition’s shareholders voted to postpone it again to December 1.
Gateway owns 27 properties in Canada, including the Grand Villa Casino in Burnaby, the Starlight Casino in New Westminster and the Cascades Casino Resort in Langley. It has a total of 25 casinos in British Columbia and Ontario and two in Alberta.
It employs 8,200 workers, operates 14,076 slots and 423 tables and 561 hotel rooms.
The delay is being blamed on the Covid-19 outbreak, which has sabotaged many mergers and acquisitions in service industries.
Leisure Acquisition issued this statement: “The company believes that it is unlikely that there will be sufficient time before June 30, 2020 to complete an initial business combination. Either the company or Gateway has the ability to terminate the merger agreement to the extent the business combination has not been completed by July 15, 2020. There can be no assurance that it will be possible to complete a business combination with Gateway prior to July 15, 2020.”
In related news, on July 7 Gateway and Unifor, the union of most of its casino workers, announced a return-to-operations agreement to reopen properties in Ontario and British Columbia, closed by Covid-19 since March.
Unifor National President Jerry Dias issued this statement: “The Covid-19 crisis has hit Canada’s gaming industry particularly hard, all but shutting down this vital sector affecting thousands of workers and their families.” He added, “This agreement with Gateway Casinos is an important step in the right direction towards providing our members with certainty in these uncertain times.”
Gateway CEO Tony Santo added, “Gateway has taken an approach to leverage CEWS (Canada’s Emergency Wage Subsidy) to offer employees paid leave during this crisis. We are very pleased that we have been able to work together to offer this significant opportunity to gaming employees working for these Gateway operations.”
Unifor is Canada’s largest private sector union, representing 315,000 workers.
