Elliott Management Launches RepairRiverbed.com
Elliott Management Corporation (“Elliott”) today launched RepairRiverbed.com as a platform for raising awareness of the long history of broken promises and inconsistent results that have destroyed shareholder value at Riverbed Technology (NASDAQ:RVBD) (“Riverbed”). Elliott also reaffirmed its $21 per share offer to acquire Riverbed and renewed its call for the Board to engage with Elliott and other interested acquirers and pursue a value-maximizing sale. The site can be viewed at http://www.repairriverbed.com.
Elliott issued the following public statement:
“In January of this year, Elliott announced an offer to acquire Riverbed for $21 per share, a 43% premium to the stock price prior to Elliott’s involvement. Since that time, Riverbed’s Board has ignored our offer and has allowed Riverbed to miss its growth plan, announce poor operating results and continue its pattern of share-price underperformance. In fact, Riverbed’s share price has underperformed all relevant benchmarks over any relevant time period. Elliott’s bid and its recommendation that the Board explore a value-maximizing sale represent an opportunity for Riverbed to stop destroying shareholder value and to repair the damage done. But to date, the Board has refused to engage with Elliott and other interested buyers, and Riverbed’s value-destroying behavior has continued.
Throughout the first half of 2014, Riverbed management repeatedly argued that their new operating plan (the “10% Plan”), announced at the analyst day on November 18, 2013, would deliver superior value to shareholders beyond what could be achieved by fully exploring strategic alternatives. Elliott and many independent research analysts publicly questioned whether this plan was achievable. Despite the public doubts, Riverbed reaffirmed the plan in statements made by Riverbed Chairman and CEO Jerry Kennelly and CFO Ernie Maddock throughout April, May and, most recently, on June 3.
Then in July 2014, Riverbed preannounced a Q2 earnings miss and conceded that it would miss the plan by a wide margin. Overpromising and under-delivering is a recurring theme at Riverbed. Management and the Board need to be held accountable, and that is something RepairRiverbed.com seeks to do.
Elliott’s views on Riverbed’s governance policies are shared by many investors and the leading proxy advisory firms. At this year’s annual meeting, shareholders sent a clear and unmistakable message to the Board by overwhelmingly voting against the management compensation plan and against the ONLY incumbent director up for reelection (the other two directors from this year’s class resigned). Unfortunately, Riverbed’s Board decided to completely ignore the wishes of shareholders. It decided to keep the Board member that was voted off and to keep its poison pill.
It is time for a change. Elliott has reaffirmed its bid to acquire Riverbed for $21 per share. Riverbed has the opportunity to repair the damage it has done to shareholder value, but only if management and the Board stop entrenching and start engaging with Elliott and other serious potential acquirers.”
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About Elliott Management Corporation
Elliott Management Corporation manages two multi-strategy hedge funds which combined have more than $25 billion of assets under management. Its flagship fund, Elliott Associates, L.P., was founded in 1977, making it one of the oldest hedge funds under continuous management. The Elliott funds’ investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, high net worth individuals and families, and employees of the firm.
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