This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Elliott Management Bids $3B For Riverbed

NEW YORK (The Deal)--With a $3 billion buyout offer that Paul Singer's Elliott Management announced on Wednesday, Riverbed Technology (RVBD) would join the ranks of Dell, BMC Software and Websense as another tech group that has gone private to navigate changes to the business.

The question is how receptive chairman and CEO, co-founder Jerry Kennelly, and the rest of the board will be to Elliott. When the hedge fund first took a stake in November, Riverbed adopted a shareholder rights plan.

Elliott's $19 per share bid represents a 26% premium to Riverbed's stock price before the hedge fund made a regulatory filing on Nov. 8, disclosing its position.

Shares of Riverbed raced past Elliott's buyout offer on Wednesday, gaining $1.68, or 9.41% to close at $19.53.

Must Read: The Deal: Pot Stocks Are Smokin'

The proposal includes a 45-day "go-shop" window that would allow the tech group to seek out higher bids. Other technology companies may be hard-pressed to top Elliott's bid, although other financial suitors could emerge.

Elliott portfolio manager Jesse Cohn told Riverboard's board in a Wednesday letter that waning sales in its legacy business and the cost of acquisitions and organic diversification efforts have hurt the company's valuation.

Riverbed said it would review Elliott's offer in a statement.

"There are an awful lot of venders going the way of Dell and BMC," said Ovum plc analyst Roy Illsley, regarding the trend of established technology companies going private.

San Francisco-based Riverbed sells hardware and software to large enterprises for their wide area networks. Its products address latency and bandwidth limitations in systems that cover substantial distances.

The market has leaned more heavily toward software in recent years, presenting a challenge to growth. "You can buy anybody's switch, router or controller and you can manage it from a software layer," Illsley said. Riverbed has to protect its legacy revenue stream, Illsley added, while developing its software business.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
RVBD $20.99 -0.05%
AAPL $110.10 -0.25%
FB $93.65 1.70%
GOOG $635.05 1.30%
TSLA $246.24 -0.54%


Chart of I:DJI
DOW 16,651.49 +179.12 1.09%
S&P 500 1,971.80 +20.44 1.05%
NASDAQ 4,748.9310 +41.1560 0.87%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs