NEW YORK (TheStreet) -- Riverbed Technology (RVBD) is gaining on Tuesday on news Elliott Management Corporation had sent a notice to its board increasing its all-cash offer to purchase all shares to $21 a share from a previous offer of $19 a share. The investment firm, one of Riverbed's largest shareholders, currently owns around 10.5% of common stock and equivalents.
The new offer represents a 5.8% premium to Riverbed's Monday closing price of $19.85.
By midafternoon, shares had added 5% to $20.84.
Elliott had previously made an offer to Riverbed on Jan. 8, which was later rejected on Jan. 15.
Since then, "our dialogue with Riverbed has yielded no indication that the company understands the potential for a sale process to create a value-maximizing outcome for its shareholders," the company said in a statement.
The offer "represents our deep and abiding skepticism that a maturing technology company whose efforts to diversify have resulted in significant lost value and whose stock has underperformed virtually every relevant benchmark over any time period since its IPO can offer superior value to stockholders on a publicly traded, standalone basis," Elliott Management said.
TheStreet Ratings team rates RIVERBED TECHNOLOGY INC as a Hold with a ratings score of C. The team has this to say about their recommendation:
"We rate RIVERBED TECHNOLOGY INC (RVBD) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."