This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Elliott Management Bids $3B For Riverbed

Stocks in this article: RVBD

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.

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

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs