Riviera shares up on takeover bid

Shares in casino operator Riviera Holdings Corp. continued higher Tuesday after it announced it had received a $262.5-million takeover offer from real estate developer Ian Bruce Eichner and the D.E. Shaw Group.

Shares rose 60 cents to $21.74. The price was above the $21 a share proposal announced Monday, suggesting the market expects a final bid to be higher.

Over the last year, the stock has ranged from $13.30 to $25.35.

Eichner, who also is developing the $2.4-billion casino resort, the Cosmopolitan, on the Las Vegas Strip south of the Bellagio, said the offer was firm.

“The market believes whatever it believes,” he said. “We made a full and fair offer for the company.”

Eichner owns 600,000, or 4.8%, of all outstanding Riviera shares, while D.E. Shaw controls 1.2 million shares, or 9.8%. The offer would need the approval of holders of 60% of the company’s stock.

“We wouldn’t have made the offer if we didn’t talk to the board and we felt comfortable that the offer would be well-received,” the New York-based developer said.

Riviera owns the Riviera Hotel & Casino on the Las Vegas Strip as well as the Black Hawk Casino in Black Hawk, Colo.

Chief Executive William Westerman owns about 20% of the company’s outstanding shares. In fiscal 2005, Riviera, which has about 1,600 workers, posted a loss of $4 million on sales of $202.2 million.

Riviera said it signed a 30-day exclusive negotiating agreement with Eichner and D.E. Shaw after the offer was received.

The company also adopted resolutions to give Eichner and D.E. Shaw the ability to make and negotiate the bid together and seek approvals for the transaction.