War of Words Precedes Riviera Board Vote

LAS VEGAS-Referring to the company he leads as a henhouse, Riviera Holdings chairman William Westerman this week told shareholders of the public casino operator to retain the current board of directors in an upcoming vote and not let in “the fox,” his term for Riv Acquisition Holdings, a group of dissident shareholders that is pushing for a new board after being rebuffed in its attempt to acquire the company outright. Riv’s point man, Paul Kanavos, responded with his own letter, countering all the “inaccurate” claims made by Westerman. The vote is scheduled for May 15.

Riviera owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, CO. Riv Acquisitions consists of Paul C. Kanavos and Robert Sillerman, the managing members of New York City-based Flag Luxury Properties LLC; Las Vegas developer Brett Torino; and Starwood Capital Group chairman and CEO Barry Sternlicht. The group controls about 20% of Riviera’s outstanding shares, about half of which Westerman sold to the group for $15 per share.

Last year, Riviera’s shareholders rejected a $17-per-share cash offer for the company from Riv. In late-March of this year, Riviera rejecteda $27-per-share offer from the same group without a shareholder vote, saying Riv’s entry into a lock-up agreement with another significant holder of Riviera’s stock violated a previous agreement, thereby allowing Riviera to summarily dismiss the offer.