LAS VEGAS-The investment group looking to acquire 100% of Riviera Holdings Corp. on Monday introduced its own slate of nominees for the Riviera board elections later this month. The move comes one week after the group, which currently controls about 20% of the company‘s stock, filed suit in District Court challenging the existing board’s March decision to reject its $27-per-share cash offer for the company without a vote of the shareholders.

Riviera owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, CO. The would-be buyer is Riv Acquisitions Holdings Inc., which consists of Paul C. Kanavos and Robert Sillerman, the managing members of New York City-based Flag Luxury Properties LLC; Las Vegas developer Brett Torino; and Starwood Capital Group chairman and CEO Barry Sternlicht.

Last year, Riviera’s shareholders rejected a $17-per-share cash offer for the company from Riv. In late-March, Riviera rejected a $27-per-share offer from the same group without a shareholder vote, saying Riv’s entry into a lock-up agreement with a significant holder of Riviera’s stock violated a previous agreement.

Also this week, Riviera Holdings Corp. retained Wachovia Bank to market and syndicate up to $245 million of senior secured credit facilities. The public casino operator says the facilities would be comprised of a new $20-million, five-year revolving credit facility and a new $225-million, seven-year term loan facility.

Substantially all of the outstanding principal amount of the term loan would mature in the seventh year of the term. Riviera would be permitted to prepay the facilities without premium or penalties, subject to any arrangements Riviera may enter into related to any Libor-based loan.

Interest on loans under the facilities would bear interest at a rate dependent in large part upon the rating received from the rating agencies. The loans would be guaranteed by all of Riviera’s active subsidiaries, the stock of those subsidiaries, and all or substantially all of the assets of Riviera and its subsidiaries.

If it obtains the facilities, Riviera says it will use some of the proceeds to refinance its 11% senior secured notes due June 15, 2010 in the original principal amount of $215 million. Riviera chairman/CEO William Westerman says the new facilities would reduce interest costs and provide greater financial flexibility.

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