Riverbed has kicked back a $3 billion-plus takeover offer from activist investor Elliott Management, stating that the proposal "undervalues" the application delivery control (ADC) specialist.
The hedge fund, which holds a 10.5% stake in Riverbed Technology Inc. (Nasdaq: RVBD), made its $19 per share offer on January 8 and followed it up with a public letter earlier this week, urging the Riverbed board to consider any takeover offers. (See Riverbed Under Pressure to Sell.)
But following a board meeting, Riverbed announced that it would not consider the offer as it "undervalues the Company and is not in the best interests of shareholders."
Riverbed also announced better than expected preliminary financials for the fourth quarter of 2013, with revenues expected to be in the range of $284 million to $285 million and net income in the range of $0.30 to $0.31 per share.
The vendor also announced that it expects revenues for the first quarter (ending March 31) to be between $262 million and $268 million.
The fourth-quarter numbers and first-quarter outlook "are proof points that our strategy to offer the most complete platform for location-independent computing is beginning to deliver results," stated Chairman and CEO Jerry Kennelly. "As the leading application performance infrastructure provider, we will continue to focus on delivering shareholder value through strong execution.”
That news, as well as the anticipation that an improved takeover offer might be forthcoming (either from Elliott or another suitor), sent Riverbed's share price up to $20.14 in early trading Thursday.
And Kennelly made it clear that he is not averse to acquisition offers at the right price. "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," he noted in a prepared statement.
— Ray Le Maistre, Editor-in-Chief, Light Reading