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Riverbed Rejects $3.36 Billion Takeover Bid From Elliott

Paul Singer, founder and president of Elliott Management Corp. Photographer: Jacob Kepler/Bloomberg
Paul Singer, founder and president of Elliott Management Corp. Photographer: Jacob Kepler/Bloomberg

Feb. 28 (Bloomberg) -- Riverbed Technology Inc. rejected a takeover offer from Elliott Management Corp. as too low after the activist investment firm raised its bid to $3.36 billion this week.

The network-equipment maker spurned the unsolicited proposal of $21 a share from New York-based Elliott, according to a statement today. The board believes the offer “is not in the best interests of shareholders.”

This week Elliott boosted its bid by 11 percent, saying the new proposal represented “undeniable premium value” above the stock before any offers, after Riverbed rejected a January offer of $19. The shares -- which traded at about $15 in early November before Elliott disclosed a stake and pushed for strategic changes -- closed at $20.65 yesterday after topping $21 Feb. 26.

“Riverbed’s board has again failed shareholders,” Elliott said in a statement today. “The clear and correct path forward for the company is to engage in a dialogue with Elliott and other interested buyers so that we can conduct expedited diligence toward exploring a value-maximizing transaction.”

Riverbed, based in San Francisco, fell 0.5 percent to $20.55 at 9:58 a.m. in New York.

Elliott has pressured technology providers including NetApp Inc., BMC Software Inc. and Compuware Corp. to boost shareholder value after taking stakes in the companies. Activist funds generally buy shares in companies and try to force corporate management and directors to make changes that boost investor returns.

‘Growth Plans’

The New York-based investment company and its affiliates own about 10.5 percent of Riverbed, making it one of the company’s largest shareholders.

On Jan. 15, Riverbed rejected Elliott’s initial proposal and released preliminary fourth-quarter earnings results that it said show its business was gaining momentum. Chief Executive Officer Jerry Kennelly said at the time that sales topped the company’s targets in all of its major products and geographic regions.

“The board will carefully review any credible offer,” Riverbed said today. “Any such offer must deliver value to our shareholders in excess of what we believe will be created as we execute on our growth plans.”

Goldman Sachs Group Inc. is Riverbed’s financial adviser.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

To contact the editors responsible for this story: Cecile Daurat at cdaurat@bloomberg.net; Sarah Rabil at srabil@bloomberg.net

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