Stay informed with the
NEW Casino City Times newsletter!
LAS VEGAS -- Riviera Holdings Corp. announced Wednesday that it will ask shareholders to approve its $426.5 million buyout by an investment group on Aug. 8.
The deal, announced in April, calls for Riv Acquisition Holdings to pay $17 a share for the company's two casinos, the Riviera and its 26-acre site on the north Strip and the Riviera Black Hawk, a 1,000-slot machine casino about 40 miles west of Denver.
Riv Acquisition Holdings -- which includes former Starwood Capital Group executive Barry Sternlicht; Scott Butera, who once worked for Donald Trump's casino interests; billionaire Neil Bluhm; and Las Vegas developer Brett Torino -- will also assume $215 million in Riviera Holdings debt.
Holders of at least 60 percent of Riviera Holdings outstanding shares must approve the buyout. Gaming regulators in Nevada and Colorado also have to approve the transaction. The company speculated the deal would close in early 2007.
"The board of directors strongly recommends a vote for the merger as being in the best interests of shareholders," Riviera Holdings Chairman Bill Westerman said in a statement. "The definitive proxy statement that we will file very shortly with the Securities and Exchange Commission will describe in detail the background of the merger agreement and reasons why the board of directors approved the merger agreement and agreed to recommend approval by our shareholders."
Westerman said speculation about additional buyers making an offer for Riviera Holdings has driven the company's stock price above the buyout agreement of $17 a share.
On Wednesday, shares in Riviera closed at $19.02 on the American Stock Exchange, up 56 cents, or 3.03 percent.
Following a two-month bidding war this spring for Tropicana parent Aztar Corp., won by Kentucky-based Columbia Sussex Corp. for $2.75 billion, gaming analysts speculated that the losing companies might make a play for Riviera Holdings.
Las Vegas-based Pinnacle Entertainment, one of four casino companies that tried to buy Aztar, was considered a possible bidder.
"Riviera has not received any other credible indications of interest," Westerman said. "Speculation that one of the losers in the bidding war for Aztar Corp. would come knocking on our door has proven to be unfounded."
Only shareholders of record after the close of trading on July 7 may vote at the August meeting.
Since the buyout by Riv Acquisitions was announced, management has shuffled at Riviera Holdings. Ron Johnson, president of the Riviera Black Hawk and the head of company's gaming operations, resigned May 16.
Riviera Holdings Chief Financial Officer Duane Krohn retired in early May. He was replaced by Mark Lefever at the end of the month.
Copyright GamingWire. All rights reserved.