Riviera Holdings announces plans to explore strategic alternatives as $30-per-share offer comes in

By Lisa Kerner

Charlotte, N.C., May 11 - While Riviera Holdings Corp. announced it will explore strategic and financial alternatives with the assistance of Jefferies & Co., Inc., it also received a bid to acquire the company for $30 per share from a group led by Ian Bruce Eichner and Dune Capital Management LP.

The Eichner Group's bid is an 11% premium over the $27 per share offered by Riv Acquisition Holdings and recently rejected by Riviera. Riv Acquisition includes 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. The investor group also nominated an opposition slate of nominees for election as directors at the company's upcoming annual meeting now scheduled for May 15.

"We are not surprised to receive a bid substantially higher than the Riv Acquisition group's below market bid," chairman, president and chief executive officer William L. Westerman said in a company news release.

"We continue to believe that $27 per share does not represent full value for our stockholders, which we believe is confirmed by both the company's current market price ($31.85 close on May 10, 2007) as well as by this current $30 per share offer. The board intends to fully consider the $30 Eichner Group bid and review it with our advisors."

"Our hiring of a financial advisor is a continuation of our efforts to thoroughly consider all opportunities to maximize shareholder value. We understand that our prime location on the Las Vegas Strip has enormous market value, as well as having appreciated significantly. We are committed to working with Jefferies to maximize this value, as well as that of our other assets, for our shareholders," Westerman added.

On May 3, Riviera said it plans to refinance its $215 million 11% senior secured notes due June 15, 2010 using proceeds from up to $245 million of new credit facilities, according to an 8-K filed with the Securities and Exchange Commission.

Las Vegas-based Riviera owns and operates the Riviera Hotel and Casino in Las Vegas and the Riviera Black Hawk Casino in Black Hawk, Colo.

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