You need to win the highest bet at the Fights. To unlock this event you need to solve sequence 3 of the story, then the fights will become available automatically in the barracks. That's the place where the headquarters of the mercenaries are situated. Just go into the building, walk down the stairs and win all 5 rounds while betting 500f all over the time.
A simple trick you should make use of: Throwing sand in the beginning of the rounds with multiple enemies will help you a lot! When you are lucky, you can take out one or maybe two enemies with one hit then. Try to counter if you can and make use of a good combo with punches and kicks.