In fall 2006, shareholders in Riviera Holdings Corp. voted down a purchase offer of $17 per share, or $426.5 million total, from Riviera Acquisition Holdings, a group led by former Starwood Hotels Chairman Barry Sternlicht.
Three months later, the Riviera received a buyout offer from a second group, Dune Capital Management, led by New York and Florida developer Ian Bruce Eichner, who’s building the Cosmopolitan next to Bellagio. The new offer of $21 per share totaled $470 million, $50 million more than the first bid. That deal, as well, fell through.
About a month ago, the first group, Riv Acquisition Holdings, tendered an offer of $27 per share for the 26-acre property, $10 higher than its original bid, which was quickly rejected by the Riviera Board of Directors on a technicality.
And in the past week, the second group, Dune Capital Management, tendered an offer of $30 a share, $9 higher than its orginal bid, to which the Riviera Board has yet to respond.
It seems clear that both groups are keen on acquiring the Riviera. One will almost certainly wind up with the joint; it's just a matter of how high the bid needs to go before the Riv's Board and shareholders accept it.
Whether or not the 52-year-old property will be demolished and replaced is anyone’s guess; neither group has announced any intentions about what they'll do with the Riv if they wind up with it.
However, consider what's planned for all of its neighbors in the next few years. The Fontainebleau megaresort is already rising next door to the north. The old La Concha and El Morocco properties next door to the south will be developed soon. Boyd's Echelon Place will be completed in 2010 directly across the street. And it's almost certain that, after spending more than a half-billion dollars on vacant acreage adjacent to Circus Circus, MGM Mirage will raze the 40-year-old clown disaster and build a CityCenter-like metaresort in its place. Thus, the Riviera should and probably will be torn down sooner than later. It just has to be sold first.
