Ex-Cigar owner looks to purchase Riviera

Friday, May 16, 1997 | 11:59 a.m.

The thoroughbred horse owner who formerly raced the legendary Cigar could become the next owner of the Riviera hotel-casino.

Entrepreneur Allen E. Paulson and the Riviera Holdings Corp. announced today they signed a nonbinding letter of intent that says Paulson would take ownership of RHC after a new company he formed would merge into it.

The $75 million deal would give RHC stockholders $15 a share plus interest earned between June 1 and the final closing date of the transaction. The stock closed on Thursday at $13.50 a share. A spokesman for Paulson said today he hopes the deal will be completed by the end of June.

"The management team is looking forward to the prospect of working with Mr. Paulson to grow the Riviera and other gaming prospects," Riviera Chairman and CEO William Westerman said in a release issued today.

Riviera Holdings is operating the Riviera as it emerges from Chapter 11 bankruptcy and through a wholly-owned subsidiary, Riviera Gaming Management, which also runs the Four Queens hotel-casino.

Last month, Riviera announced that a group of shareholders completed a Securities and Exchange Commission filing announcing that representatives of 59 percent of the stock had offered a one-year option to Paulson to purchase their shares. At the time, Westerman said an agreement "makes it highly unlikely the secondary offering will proceed in the near future."

McCarthey said it is Paulson's goal to use the Riviera as the foundation for a larger gaming enterprise.

Paulson is chief executive officer of Full House Resorts Inc., a California casino company with holdings in South Dakota and the Mississippi Gulf Coast.

The former owner of Cigar raced four stakes-winning horses in 1995, earning him an Eclipse Award as North America's leading horse owner. His horses earned $7.2 million in 1995, tops in North America, and owned or co-owned six North American champions. He won the 1996 Irish Derby with Zagreb.

Paulson, a former mechanic with TWA, operated Gulfstream, which makes corporate jets, in Savannah, Ga., sold the company to Chrysler, then repurchased it before retiring from the aviation industry.

He's one of the primary financial backers of Georgia Southern University, and the College of Science and Technology and the 16,000-seat football stadium there are named for him.

David Thompson, an information specialist at Georgia Southern, estimated Paulson has donated more than $8.5 million to the university at Statesboro.

"He's a real rags-to-riches kind of story," said Thompson, who said Paulson has a soft-spoken personality.

Thompson said Paulson will receive an honorary doctorate in science from the university next month.