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Major Shareholder of Riviera Vows to Vote Against Takeover

April 13, 2006|From the Associated Press

A major shareholder of casino operator Riviera Holdings Corp. said that an offer to buy the company for $17 a share was too low and that it would vote against the deal.

"We don't think this is the right price," said Marc Sole, senior vice president of New York investment firm D.E. Shaw & Co., whose group of affiliated firms holds a 9.9% stake in Las Vegas-based Riviera.

"If this deal fails and if there's no other bid forthcoming, so be it," he said Wednesday.

D.E. Shaw made its position public in a filing to the Securities and Exchange Commission on Tuesday. It said in the filing that similar offers to buy Aztar Corp., owner of the Tropicana hotel-casino on the Las Vegas Strip, would imply a value for Riviera Holdings of $36 a share.

Last week, an investor group called Riv Acquisition Holdings Inc. said its board had agreed to buy Riviera Holdings for $17 a share in cash, or about $211.5 million. It also agreed to assume about $215 million in debt.

The deal needs to be approved by 60% of shareholders.

Scott Butera, president of Riv Acquisition, said he was confident that the deal would go through. Riviera agreed to pay 3.75% of the purchase price, or about $7.9 million, to Riv Acquisition if the deal was broken.

"Our binding agreement was the culmination of a very long process which the company was involved in," Butera said. "We have a group that is ready to commit."

Riviera Chief Executive William Westerman, who in January sold 1 million shares to Riv Acquisition for $15 each, said he would vote with his remaining 8.9% stake in favor of the deal.

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