Riverbed Technology Sees Q4 Results Above View; Rejects Elliott's Takeover Bid

(RTTNews) - Networking solutions provider Riverbed Technology Inc. (RVBD) on Wednesday forecast financial results for the fourth quarter above analysts' estimates. The company also said its board of directors has rejected an unsolicited $19.00 per share takeover offer from activist hedge fund Elliott Management Corp., saying that the proposal undervalued the company and was not in the best interests of its shareholders.

San Francisco, California-based Riverbed Technology specializes in improving the performance of networks and related applications, and helps optimize data traffic and bandwidth utilization across networks.

For the fourth quarter, Riverbed Technology now forecasts adjusted net income of $0.30 to $0.31 per share, up from the company's prior outlook for adjusted net income of $0.26 to $0.27 per share.

The company also raised its fourth-quarter adjusted revenue outlook to a range of $284 million to $285 million from the prior range of $270 million to $276 million.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $0.26 per share for the fourth quarter on revenues of $273.32 million. Analysts' estimates typically exclude special items.

Jerry Kennelly, chairman and CEO, Riverbed Technology said, "Riverbed executed well to a strong 2013 finish. Sales in the fourth quarter exceeded our expectations across all major product lines and geographies, demonstrating strong ongoing demand and the differentiated value that we deliver to customers across our full product portfolio."

Looking ahead to the first quarter, Riverbed Technology forecasts adjusted earnings of $0.21 to $0.23 per share and adjusted revenue of $262 million to $268 million. Analysts expect the company to earn $0.23 per share for the quarter on revenues of $258.49 million.

Responding to Elliott Management's takeover offer, Kennelly said, "While the Board will carefully review any credible offer made to acquire the company, 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 and capitalize on the significant investments we have already made in that regard."

Last Wednesday, Elliott Management offered to buy Riverbed Technology Inc. (RVBD) for $19.00 per share, or a total of about $3.08 billion.

In November 2013, Elliott Management said it accumulated a 10.4 percent stake in Riverbed Technology to become its largest shareholder, and said it will push for strategic changes at the company. In a regulatory filing, Elliott Management said that Riverbed Technology was "significantly undervalued".

In response to Elliott Management, Riverbed Technology said at that time that it was focused on creating value for all of its shareholders and maintained an open dialogue with its shareholders, including Elliott Management.

In addition, Riverbed Technology adopted a poison pill that imposed a significant penalty upon any person or group that acquired 10 percent or more of the company's outstanding shares without the approval of its board of directors.

Goldman Sachs is serving as financial advisor to Riverbed Technology, while Wilson Sonsini Goodrich & Rosati is serving as its legal advisor.

RVBD closed Tuesday's trading at $19.79. In Wednesday's pre-market, the stock is trading at $19.97, up $0.18 or 0.91 percent.