Riverbed rejects Elliott’s buyout offer-Reuters

(Reuters) – Network gear maker Riverbed Technology Inc rejected hedge fund Elliott Management Corp‘s $3.08 billion takeover offer and estimated fourth-quarter results above expectations.

Riverbed shares rose 3 percent to $20.44 in premarket trading, above Elliott’s $19 per share offer price.

Elliott’s proposal was not in the best interest of shareholders, Riverbed said on Wednesday.

“We announced favorable preliminary fourth-quarter 2013 results and our first-quarter 2014 view, which are indicative of the strong early traction we have achieved against our strategy,” Riverbed Chief Executive Jerry Kennelly said in a statement.

Elliott could not be immediately reached for comment.

The activist hedge fund offered to buy Riverbed last week for about $3.08 billion in cash.

Riverbed forecast first-quarter revenue of $262 million-$268 million, above analysts’ view of $258.5 million.

The company estimated fourth-quarter adjusted earnings of 30-31 cents per share on revenue of $284 million to $285 million.
Analysts on average were expecting earnings of 26 cents per share on revenue of $273.3 million, according to Thomson Reuters

Elliott Management on Monday urged Riverbed’s rival Juniper Networks Inc (JNPR.N: Quote, Profile, Research, Stock Buzz) to buy back shares, start paying a dividend and consider slimming down.

Riverbed has been struggling with the integration of Opnet, a maker of software to manage traffic on networks, which it acquired in 2012 to counter a slowdown in its main wide area network optimization business.

Goldman Sachs is serving as financial adviser to Riverbed and Wilson Sonsini Goodrich & Rosati is serving as legal adviser.