The ink had barely dried on newspapers reporting on the conference call held by management of Riviera Holdings Corporation (RIV) in which they announced that they were going to concentrate more on pursuing new customers rather than buyers when out popped a news release on Monday announcing a new purchase offer for the company.
RIV officials said they had received a non-binding proposal from real estate developer Ian Bruce Eichner and the D.E. Shaw group, on behalf of an entity to be formed by them, to acquire the company for approximately $262.5 million or $21 per share.
The company said the proposal was conditioned on satisfactory completion of due diligence, negotiation of definitive transaction documents, and receive of necessary board, stockholder, third part and regulatory approvals.
The negotiations have a 30-day window, officials said.
In the announcement, company management noted that "even if Riviera enters into such an agreement, there is no assurance that the agreement would receive the requisite approvals from Riviera’s shareholders and governmental authorities, including gaming regulators."
Earlier this year, the company received a buyout offer from Riv Acquisitions Holdings Inc. for a share price of $17 each. Several shareholders, including the Shaw group, strongly opposed the offer and it subsequently was rejected.
One of the complications at the time was a previous sale by Chairman and CEO Bill Westerman of nearly one million shares, or about half his holdings, to the buyout group for $15 a share. There also was a contingency for the sale of the remainder of Westerman’s shares that was not completed.
Following the announcement of the Eichner/Shaw group buyout offer, Standard & Poor’s Ratings Service placed the Riviera Holdings debt on CreditWatch with developing implications.
S&P said that if the company’s outstanding notes are fully purchased, it would withdraw its ratings on Riviera.