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Starwood Capital Bids On Las Vegas Riviera

Starwood Capital Bids On Las Vegas Riviera

Barry Sternlicht’s Starwood Capital Group LLC is bidding to take over Riviera Holdings Corp., four years after a bid he backed was rejected by shareholders.

Las Vegas RivieraBloomberg reports that Starwood Capital has acquired Riviera’s first mortgage for about 50 cents on the dollar and is negotiating a pre-packaged bankruptcy. Riviera, which owns a Colorado casino in addition to the 55 year-old Las Vegas resort, defaulted on a US$245 million loan last year.

In 2006, a group headed by Sternlicht offered to buy Riviera for US$17 a share; Riviera shareholders rejected that offer, and the stock now trades for about 40 cents.

Starwood Capital could own Riviera’s 26-acre resort for “about US$5,000 a room, which is less than the cost of the furniture,” Sternlicht said in a February conference call. “I’m thinking of it as a long-term parking lot. We’re just going to hold it and have very little invested in the deal.”

Riviera Hotel & Casino Las Vegas, located on the northern Vegas Strip, has 2,075 guestrooms.