Esplanade Capital Raises Offer For Archon Corporation to $19.25 per Share

Cites Impending Positive Developments Including the Sale of Its Maryland Property and the Proposed Project on Its Las Vegas Property

Esplanade Capital LLC, the second largest outside shareholder (based on Bloomberg data) of Archon Corporation (OTC: ARHN), has raised its offer to acquire all outstanding shares of Archon Corporation to a price of $19.25 per share in a negotiated transaction, subject to confirmatory due diligence. Esplanade Capital has delivered a letter to Archon's board of directors, the full text of which follows:

For Delivery on January 16, 2014

Archon CorporationBoard of DirectorsAttention: Suzanne Lowden, Secretary2200 Casino DriveLaughlin, NV 89029

Dear Members of the Board of Directors:

In March 2013, Esplanade Capital LLC (“Esplanade” or “we”) made an offer to acquire Archon Corporation (the “Company”) at $17.50 per share subject to confirmatory due diligence, which represented a blockbuster 61.6% premium based on historical trading prices. In June 2013, we raised our offer to $18.50 per share, subject to confirmatory due diligence. Despite our repeated attempts to reach out to the Company, the Board of Directors (the “Board”) has refused to meet with us. Notwithstanding your stonewalling, we remain extremely committed to pursuing a negotiated transaction to acquire all of the outstanding shares of the Company.

In light of some recent developments, we are now raising our offer to $19.25 per share, subject to confirmatory due diligence. While there are many factors driving our increased offer, the two primary developments are:

1. The rapidly approaching sale of the Gaithersburg Maryland property for $76.3 million expected to close no later than April 30, 2014.
2. The recent news of the proposed “All Net Arena and Resort” on what we believe to be the Archon land on the Las Vegas Strip. While this ambitious project proposed by former UNLV and NBA player Mr. Jackie Robinson has received substantial attention in the media, the Company has not disclosed what, if any, terms have been struck with Mr. Robinson and this venture.

We believe our premium offer is in the best interests of all shareholders and the most direct path to maximize value for all shareholders.

As we have stated previously, we have the resources and experience to close this acquisition. Esplanade has been investing for over 14 years. To assist us in this transaction, we expect to be working with a longtime outside relationship who has built an impeccable track record of several billion dollars worth of real estate acquisitions, restructurings, and recapitalizations over the past three decades. With the Company’s cooperation, we are highly confident in our ability to finance this transaction based on discussions with our network of equity and debt financiers. We are prepared to immediately commence negotiations on an acquisition agreement.

We continue to view the Company’s stock as undervalued. Unfortunately, we have no confidence that the situation will improve under the existing Board and management. We believe that the Company seems to be run as the personal fiefdom of Mr. Paul Lowden and not for the benefit of all shareholders given the series of related party transactions between the Company and the Lowden family, the Company “going dark” in 2011, and the galling lack of responsiveness to our requests as a concerned shareholder. We remind the Board that it has fiduciary duties to all shareholders and not just to Paul Lowden and his family.

While we would prefer to negotiate an acquisition privately, the Company’s response so far indicates that the Board prefers to do otherwise. Accordingly, we are concurrently releasing this letter to the public in perhaps the vain hope that we will finally receive a serious response to our offer.

We urge the Board to cease its stonewalling and embrace its fiduciary duties by immediately commencing negotiations with us or publicly committing to a sales process with a level playing field.

Very truly yours,

Shawn W. Kravetz

President

ABOUT ESPLANADE CAPITAL LLC:

Esplanade Capital is a Boston based investment management company founded in 1999 to manage capital for a small number of like-minded families, private investors, and institutions

Esplanade Capital LLCShawn Kravetz, [e-mail]