SAN FRANCISCO (AP) — Riverbed Technology's board has rejected Elliott Management's nearly $3.08 billion buyout offer. The computer networking equipment maker also provided fiscal fourth-quarter earnings and revenue expectations above its prior guidance.
The shares rose in Wednesday premarket trading.
Riverbed said its board felt Elliott's bid undervalued the company and wasn't in its shareholders' best interests.
Last week New York-based Elliott made an offer of $19 per Riverbed share.
The hedge fund is one of Riverbed's largest investors with 10.5 percent of its shares. It disclosed a large stake in the San Francisco company in November, saying that Riverbed's shares are undervalued. Riverbed subsequently adopted a shareholders rights plan, often known as a poison pill, to thwart potential hostile takeovers.
Riverbed announced Wednesday that it now expects fiscal fourth-quarter adjusted earnings of 30 cents to 31 cents per share, up from its prior outlook of 26 cents to 27 cents per share. The company now anticipates revenue between $284 million and $285 million. That's above its previous guidance of $270 million to $276 million.
Analysts polled by FactSet predict earnings of 26 cents per share on revenue of $273.6 million.
Chairman and CEO Jerry Kennelly said in a statement that Riverbed's quarterly sales topped expectations across all major product lines and geographies.
For the first quarter, Riverbed foresees adjusted earnings of 21 cents to 23 cents per share on revenue of $262 million to $268 million. Wall Street is calling for earnings of 23 cents per share on revenue of $260.5 million.
The company will report its final fourth-quarter and full-year financial results on Jan. 30.
Shares of Riverbed Technology Inc. shares rose 31 cents, or 1.6 percent, to $20.10 in premarket trading about 20 minutes before the market open.
A request was made for comment from Elliott Management before business hours.