Riviera board chairman urges shareholders to reject Riv Acquisition nominees

By Lisa Kerner

Charlotte, N.C., May 8 - Riviera Holdings Corp. chairman of the board William L. Westerman urged shareholders to "defeat a group of investors who are attempting to acquire your company for a below-market price," by rejecting Riv Acquisition's board nominees at the May 15 annual meeting.

"Don't be confused by material sent to you by the Riv Acquisition group. We urge you to not return any proxy card sent by the Riv Acquisition group, even as a protest vote," Westerman said in an open letter to the Las Vegas hotel company's shareholders.

"The Riv Acquisition group has a history of lowering their offer price," Westerman said. "The board has engaged in negotiations with the Riv Acquisition group over the past several years and continues to be willing to do so. Over time, their offers have gone from $23.00 to $15.00 to $16.00 to $17.00, and only recently risen to over $20.00. The Riv Acquisition group has recently submitted a highly conditional offer to acquire the entire company for $27.00 per share in cash."

According to Westerman, Riviera is concerned with the group's ability to fund the offer that fails to represent fair value for the company's shareholders and shuts out potential higher offers.

"Your board is willing to negotiate the sale of the company," the letter to stockholders stated. "Your board will not preclude the ability of the company to receive the highest and best offer for its shareholders. Can the same by said for the Riv Acquisition group's handpicked nominees?"

Riv Acquisition consists of Paul C. Kanavos and Robert Sillerman, the managing members of New York-based Flag Luxury Properties, LLC; Las Vegas developer Brett Torino and Starwood Capital Group chairman and chief executive officer Barry Sternlicht.

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