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New bid made for Riviera Holdings

March 27, 2007|From Bloomberg News

Riviera Holdings Corp., owner of a casino on the Las Vegas Strip, received a $336.5-million buyout offer from a group of investors including Barry Sternlicht and Robert F.X. Sillerman.

Sternlicht, founder of Starwood Hotels & Resorts Worldwide Inc., and Sillerman, owner of the "American Idol" television show and Elvis Presley's estate, offered $27 a share in cash, according to a Securities and Exchange Commission filing Monday.

The Riviera Hotel & Casino sits on 26 acres and is one of the last parcels available for redevelopment on Las Vegas' main casino corridor. The new offer exceeds a bid of $212 million, or $17 a share, from Sternlicht's group that was rejected by shareholders in August.

"You could see the board of directors looking long and hard at" the new offer, said Matt Sodl, managing director of Innovation Capital, an investment bank based in Los Angeles.

Shares of Las Vegas-based Riviera rose $2.63 to $28.10.

Investors are interested in Las Vegas casinos because of the cash they generate and the value of their real estate. On March 21, New Frontier Hotel & Casino owner Phil Ruffin said he was in talks to sell his 34-acre property on the strip for $1.2 billion, or $35 million an acre.

The current offer from Riv Acquisition Holdings Inc., which also includes real estate developers Paul Kanavos and Brett Torino, expires Friday.

A November bid of $261.7 million, or $21 a share, from a group led by hedge fund company D.E. Shaw & Co. expired without an agreement.

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