Riviera Holdings
(AMEX:RIV) shares jumped earlier this week after the Las Vegas-based
company announced that it had began to receive bids in connection with
its sale process. The process comes after activist shareholders had
pressured the company via a proxy solicitation to take actions to
unlock shareholder value.
Currently, a $30 per share offer from
a group led by Ian Bruce Eichner and Dune Capital Management is the
best bid but there are many other potential bidders. In fact, Flag
Luxury - the hedge fund that previously pushed for a sale - said
yesterday that their group is currently considering all of its options,
which may include making a higher offer than the $30 per share
expression of interest that the board announced on May 11th.
Many
shareholders are hoping that Flag Luxury will utilize their existing
position as largest shareholder as leverage to make a higher bid for
the company. Ideally, this could spark a bidding war that could propel
the stock significantly higher than $30 per share. And given the
M&A in the gaming sector by private equity not so long ago, this
may be a strong possibility. Regardless, this is certainly a stock
worth keeping an eye on!
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