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LAS VEGAS-Riv Acquisition Holdings has until the middle of the month to exercise its option to acquire an additional 9% of Riviera Holdings Corp., which would give it approximately 20% of the company’s outstanding shares. Moreover, Clark County District court has determined that the option does not, as Riviera has contended, hurt its bid to acquire the entire company, though recent defensive maneuvers by Riviera’s board of directors may have made it more difficult.

Riviera Holdings owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and the Riviera Black Hawk Casino in Black Hawk, CO. Riv Acquisitions Holdings Inc. includes 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 shareholders rejected a $17-per-share cash offer by RAH for Riviera. In late-March, Riviera’s Board rejected a $27-per-share offer from RAH without a shareholder vote, saying Riv’s entry into a share purchase agreement with a significant holder of Riviera’s stock earlier in the month violated a previous agreement and, thereby, prevents RAH from acquiring Riviera outright for a period of three years.

RAH filed suit in April challenging the board’s determination and in August a Clark County district court judge granted its request for summary judgment and wholly denying with prejudice the Riviera board’s request for the same. In between filing and winning the lawsuit RAH upped its bid for the company to $34 per share in order to top a competing $30-per-share offer that came in.

Riviera’s board has yet to make any new determination with regard to RAH’s bid other than to say it will be considered. Around the same time the court decision came down, however, Riviera board members amended company bylaws to limit the power to call special shareholder meetings to the chairman and president of the board of directors, thereby limiting RAH’s ability to prompt a shareholder vote regarding its offer.

One of the big questions now is whether recent financial turmoil has dried up too many of the sources that would finance the $424-million buy-out offer should it eventually be approved by shareholders. A spokesman for RAH declined comment, deferring to the related court and SEC documents. An executive with Riviera could not be reached Friday for comment.

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