Application Performance Infrastructure company Riverbed (RVBD) has been given an offer from Elliot Management for acquiring the company for $19 a share, or approximately $3 billion. Hedge fund group Elliot owns approximately 10.5 percent of the common stock of Riverbed. A letter written by portfolio manager Jesse Cohnand asks Riverbed to either accept its buyout offer, or seek other offers.
"We are aware that numerous parties have expressed acquisition interest in Riverbed, and this structure guarantees that the company will secure a healthy premium for its stockholders while holding open the opportunity to obtain an even higher premium," Cohn wrote.
San Francisco-based Riverbed has also responded to Elliott's earlier advance with several safety measures. It instituted a stockholder rights plan or so-called "poison pill" to make it more difficult for Elliott to gain a controlling stake in the company. Riverbed responded to the Elliot letter with a statement saying that its board "will review the offer and communicate its views in due course."
As a secondary defensive move, Riverbed has brought on Goldman Sachs as an advisor, to help defend against a hostile takeover - according to a person familiar with the situation. Elliot has tried similar buyout tactics before, with Compuware, but backed off when it sold parts of its business. It successfully asked for other companies to sell themselves, including Novell and BMC Software.
Riverbed stock closed Wednesday up almost 10 percent, at $19.53.