Riviera Holdings' proxy contest with Flag Luxury to end with withdrawal of nominations

By Lisa Kerner

Charlotte, N.C., May 14 - Riviera Holdings Corp. said the group led by Flag Luxury Riv, LLC is withdrawing its nomination of five candidates for election as directors at the company's annual meeting on May 15.

The withdrawal was due primarily to Riviera's May 11 announcement that it would seek strategic alternatives, according to a company news release.

"Riviera's board of directors is committed to maximizing value for stockholders," chief executive officer William L. Westerman said in the release.

"We believe it is in the best interests of all stockholders that the investor group has withdrawn its costly and disruptive proxy fight. The board is committed to working with its financial advisor, Jefferies and Company, to evaluate all strategic alternatives, including a sale of the company."

Riviera also received a $30-per-share cash offer from a group led by Ian Bruce Eichner and Dune Capital Management LP. The 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.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.