Elliott Management Boosts Riverbed Offer To $21 A Share - Update

(RTTNews) - Activist hedge fund Elliott Management Corp. has raised its offer for network equipment maker Riverbed Technology Inc. (RVBD) to $21.00 a share in cash. The fund also made it clear that it will not increase the offer any further unless it conducts a due diligence. Shares of Riverbed rose five percent following the news.

Elliott said the new offer represents an "undeniable premium value" far above Riverbed's stock price before any offers. Elliott indicated no further increase to its offer without getting access to private materials for due diligence.

Elliott Management had offered to buy Riverbed for $19.00 a share or for about $3.08 billion in January. However, Riverbed rejected that offer saying the proposal undervalued the company. The new offer values Riverbed at about $3.36 billion.

Activist investing firm Elliot had disclosed in November that the firm and its associates had accumulated a 10.4 percent stake in Riverbed, making it the largest shareholder of the company.

Elliot criticized Riverbed for not showing any interest for substantial bids from potential buyers. Elliott in a communique to Riverbed said, "We believe shareholders, the actual owners of the Company, should be outraged by the Board's behavior. The Board has been ignoring numerous potential buyers, and the Board has also bizarrely concluded that it is not worthwhile to allow these parties, including Elliott, to conduct a few weeks of diligence to put forth our highest and best offers for the Company."

Elliott urged Riverbed's board to allow them to conduct a due diligence review immediately, as sign that it is serious about substantial offers.

RVBD is currently trading at $20.85, up $1.00 or 5.04%, on the Nasdaq.