"We feel strongly that the company's stockholders deserve the opportunity to consider our offer and the Board should not stand in the way, particularly given that its opposition is based on what are clearly flawed arguments," states the letter, which indicates that Riv will be sending the Riviera Board an executed merger agreement shortly and would require an immediate response, concluding, "We expect that Riviera's stockholders will hold the Board accountable if it continues to ignore its fiduciary duties."

The letter states that the Riviera Board previously granted Riv a waiver of the anti-takeover provisions in Riviera's articles of incorporation as well as the business combinations provisions in the Nevada corporate statute. In the letter Riv also denies that it made repeated requests for board permission for the lock-up agreement. Instead, Riv alleges it asked for approval to acquire outright the stock held by Triple Five and Dominion Financial and only after the Board refused did it purchase an option from Triple Five and Dominion Financial that is conditioned on obtaining the necessary Board approvals.

"Ignoring the merits of our offer is directly contrary to the Board's fiduciary duties," states the letter from Riv. "The Board's legal responsibility is to obtain the highest and best possible value for its stockholders, not to find spurious reasons why bidders (and in this case, the sole bidder) should be disqualified from acquiring the company."

Riv's offer is the fourth the company has received in the past year. In November 2006, it received a $21-per-share offer from a partnership of real estate developer Ian Bruce Eichner and the D.E. Shaw group, which is already a major shareholder of Riviera. The 30-day exclusive negotiating agreement came and went without any action being taken by either side.

In April 2006, Riviera Holdings signed a $17-per-share takeover agreement with Riv, which earlier in the year got Riviera CEO William Westerman to agree to sell his shares for $15 per share. The takeover agreement sparked a substantial response from investors, including class-action complaints and scathing letters from the company's largest shareholders vowing to vote against the merger. Among other things, the letters question the Riviera board's valuation of the company's real estate in Las Vegas, which represents one of the last large developable parcels of land on the Strip.

In August, just before shareholders were to vote on the $17-per-share offer, a $20-per-share offer was submitted by International Gaming & Entertainment LLC, a special-purpose affiliate of BT Enterprises LLC, a Boston-based merchant equity fund. Riviera promptly delayed its shareholder vote and said it would review the proposal.

At the end of August, shareholders voted down the $17-per-share offer. In September, Riviera's board of directors terminated consideration of the $20-per-share offer.