Riverbed Confirms Unsolicited Proposal From Elliot Management

Riverbed Confirms Unsolicited Proposal From Elliot Management

Riverbed Technology, Inc. (NASDAQ:RVBD) confirmed that it has received an unsolicited proposal from Elliot Management Corporation to acquire all its outstanding shares.

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The acquisition would be set to occur at $19 per share in cash.

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Riverbed stock surged 12%

Yesterday following the news of Paul Singer’s hedge funds, Elliot Associates, L.P. and Elliot International Limited making an offer to acquire Riverbed Technology, Inc. (NASDAQ:RVBD), the network equipment maker’s stock surged over 12%.

Elliot Management Corporation yesterday offered to acquire all the outstanding shares of common stock of Riverbed Technology, Inc. (NASDAQ:RVBD) for approximately $3.08 billion or $19 per share.

Elliot is currently one of the largest stockholders of Riverbed Technology with a 10.5% stake in the network equipment maker.

Riverbed’s confirmation

Following yesterday’s news, Riverbed Technology, Inc. (NASDAQ:RVBD) confirmed that it has received an unsolicited proposal from Elliot Management Corporation to acquire all outstanding shares of Riverbed for $19 per share in cash.

In its statement, the network-equipment maker indicated that in keeping with its fiduciary duties and in consultation with its financial and legal advisors, its board will review the offer and communicate its views in due course.

However, Riverbed Technology, Inc. (NASDAQ:RVBD) clarified that no assurance can be given that the Elliot proposal or any other transaction will be consummated.

The network equipment maker further clarified that it doesn’t intend to disclose developments regarding these matters unless and until its Board of Directors determines there is a material need to update the market. Moreover, as part of the commitment towards the shareholders, the Riverbed Board would regularly review all options for generating and delivering value.

Riverbed’s statement further indicated that its Board will review the Elliot proposal thoroughly, taking into account the network equipment maker’s current strategic plan and growth initiatives.

Last month, Elliot Management issued two amendments to its original 13D filing made in November, which disclosed its acquiring a beneficial interest of 10.4% in Riverbed.

In the first amendment, Elliot disclosed that it has directly conveyed to Riverbed Technology, Inc. (NASDAQ:RVBD)’s Board of Directors its views on the appropriate next steps that Riverbed should take to enhance shareholder value. In its second amendment, Elliot added collectively, Elliot, Elliot International and EICA continue to have combined economic exposure and voting power in Riverbed of approximately 10.4% of the outstanding common stock.

Interestingly, Elliot’s holdings in Riverbed Technology, Inc. (NASDAQ:RVBD) are above the 10% threshold specified in Riverbed Technology, Inc. (NASDAQ:RVBD)’s Stockholder Rights Plan (a.k.a. ‘poison pill’) which it instituted last November, shortly after Elliot disclosed its stake. According to Bloomberg’s November 14 article, Riverbed was working with Goldman Sachs Group Inc (NYSE:GS) to help it study strategic options.

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports
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