Elliott Associates makes $3.1 billion to buyout Riverbed

Posted Jan 9, 2014

The Elliott Associates hedge fund made a $3.1 billion offer to buy out networking company Riverbed Technology. Elliott Associates is offering $19 per share in cash.

?We believe in the quality of Riverbed?s assets,? stated Elliott portfolio manager Jesse Cohn in a letter that was sent to Riverbed?s board of directors. ?However, Riverbed?s valuation has been impaired by slowing growth in its core WAN optimization market and by significant investments in both acquisitions and operating expenses undertaken to diversify away from the core WAN optimization business.?

Elliott Associates acquired a minority stake in the company back in September. As of November, Elliott Associates owned around 10.4% in Riverbed.

Riverbed Technology shares spiked after the announcement. The company stock closed up 9.41% to $19.53 on Wednesday. Riverbed Technology has a market cap of over $3.1 billion now, which means that investors believe that Elliott may increase their bid in the future.

[Source: Forbes]