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SPAC Sagaliam Acquisition Corp. (NASDAQ:SAGA) said that its merger with restaurant operator Arabian Entertainment Company, or AEC, has been scrapped over financing issues.
Sagaliam said that AEC terminated the deal, asserting that Sagaliam had not received commitments for at least 50% of the deal's minimum cash amount by the merger agreement's deadline. AEC also asserted that it is owed a $1M termination fee as per their agreement, according to an SEC filing.
Sagaliam said that it disputes its obligation to pay the termination fee and is exploring an alternative proposal for acquiring AEC. It added that it intends to continue to look for an "appropriate" takeover target.
AEC and Sagaliam announced plans in November to combine and create a new publicly traded company called Tarfeeh Holdings. The deal valued AEC at around $379M.
Based in Saudi Arabia, AEC operates restaurants and entertainment venues in the Middle East and North Africa. The company, which is owned by Supraeon Investments, also owns the exclusive rights to Applebee's and Ocean Basket restaurants in Saudi Arabia.
Sagaliam held its initial public offering in December 2021, raising $100M.