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Riviera Receives, Rejects Highest Offer Yet

LAS VEGAS-The owner of the Riviera Hotel Casino on the Strip receives and rejects a $27-per-share offer from Riv Acquisition Holdings, which last year offered $17 per share.

By Brian K. Miller | Updated on March 30, 2007

LAS VEGAS-Casino owner Riviera Holdings Corp. this week received and quickly rejected a $27-per-share cash offer from Riv Acquisitions Holdings Inc., which last year made a $17-per-share offer that was rejected by shareholders. This time around, Riviera Holdings Corp. says it’s Riv that sunk its own ship.

The owner of the Riviera Hotel Casino on the Strip and other properties says is not in a position to consider the merger proposal because Riv has entered into a lockup and option agreement for 9.2% of Riviera’s outstanding stock now held by Triple Five Investco LLC and Dominion Financial LLC, without prior approval by Riviera’s board of directors. Riviera chairman/CEO William Westerman says the action has triggered the defensive provisions of Nevada’s Business Combination Law and Riviera’s articles of incorporation applicable to “substantial stockholders.”

Westerman says such an action by Riv according to the Business Combination Law disqualifies Riv and its related parties from engaging in a merger or other combination with Riviera for the three-year period specified in the Business Combination Law. In addition, Riviera says its articles of incorporation state that if Riv ultimately buys Riviera shares from Triple Five, Dominion Financial or anyone else without the Riviera board’s prior approval, Riv’s voting rights as to those shares will be reduced to 1/100 of one vote per share.

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