An investment firm has unleashed a torrent of criticism of US vendor Riverbed Technology for allegedly misleading shareholders and stonewalling buyout offers.
Elliott Management Corporation, which currently has a 10.5 percent stake in Riverbed, made a $21-per-share buyout offer last month that was rejected by the board. Riverbed CEO Jerry Kennelly then said no "credible" bids had been received in an interview with Bloomberg last week.
"If a serious party wants to call me with a credible offer, I’ll take the call. I haven’t had that," Kennelly said in the interview.
A furious Elliott replied that the dismissal of recent buyout offers, including its own, is "outrageous behaviour" and the board had now "crossed a line from failing shareholders to actively misleading them".
The investment firm has released a statement of "fact checks" in which they allege underperformance by Riverbed and the authenticity of their buyout offer.
Elliott is also critical of Riverbed not allowing potential buyers to perform diligence.
"The clear and correct path forward is for the board to stop misleading shareholders and instead allow all interested buyers, including Elliott, to conduct diligence with an eye toward exploring a value-maximising transaction," said Elliott portfolio manager Jesse Cohn.
"As the presentation put forward by Moelis today shows, our bid of $21-per-share represents compelling value for Riverbed shareholders that any responsible Board should explore," said Cohn.
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