(Updates share price in final paragraph.)
Jan. 14 (Bloomberg) -- Elliott Management Corp., an activist investor that made a $3.08 billion bid for Riverbed Technology Inc. in an effort to spark a bidding contest, said shareholders have responded favorably to the move.
In a letter to Riverbed’s board, Elliott said it has spoken to the majority of the company’s shareholder base and investors were “overwhelmingly supportive” about pushing for a takeover. If a deal doesn’t happen, shares of the San Francisco-based company are expected to drop back down to the $14 to $15 range, Elliott said, compared with almost $20 now.
Elliott, which controls about 10.5 percent of Riverbed’s common stock, has a history of acquiring large stakes in companies and pushing for changes. With Riverbed, the goal is to use its offer to entice higher bidders. The strategy hasn’t always worked. Last year, it made an offer for Compuware Corp. that was rejected. No one stepped in to top that bid.
Riverbed investors are confident that the computer- networking company is a good candidate for acquisition, New York-based Elliott said today.
“Many of the shareholders we spoke with volunteered that they support a sale process because they are frustrated by historical execution and skeptical of the company’s plan and ability to execute in the future,” Elliott said in its letter to the board.
John Christiansen, a spokesman for Riverbed, declined to comment.
Riverbed jumped 9.4 percent on Jan. 8 after Elliott made its $19-a-share offer. The stock was unchanged today in New York.
--With assistance from Mark Milian in San Francisco. Editors: Cecile Daurat, Reed Stevenson