Bloomberg: Riverbed Technology Working With Goldman Sachs To Study Options

(RTTNews) - Networking solutions provider Riverbed Technology Inc. (RVBD) is working with Goldman Sachs Group Inc. (GS) to help it study strategic options, Bloomberg reported Wednesday, citing people with knowledge of the situation.

According to the Bloomberg report, while Riverbed Technology is not soliciting bids, it has already attracted informal interest from private equity firms for a leveraged buyout.

San Francisco, California-based Riverbed Technology specializes in improving the performance of networks and related applications, and helps optimize data traffic and bandwidth utilization across networks.

Last Friday, Riverbed Technology shares rose after activist hedge fund Elliott Management Corp. said it has accumulated a 10.4 percent stake and will also push for strategic changes at the company. In a regulatory filing, Elliott Management said that Riverbed Technology was "significantly undervalued".

In response to Elliott Management, Riverbed Technology said it is focused on creating value for all of its shareholders and maintains an open dialogue with its shareholders, including Elliott.

The company also adopted a poison pill that imposes a significant penalty upon any person or group that acquires 10 percent or more of the company's outstanding shares without the approval of its board of directors.

In late October, Riverbed Technology reported an 85 percent plunge in profit for the third quarter from last year, reflecting higher amortization and income tax adjustments.

The company's net income for the third quarter was $3.82 million or $0.02 per share, down from $24.73 million or $0.15 per share in the prior-year quarter. However, revenues for the quarter increased 20 percent to $261.72 million from $218.60 million in the same period last year.

RVBD closed Wednesday's regular trading at $19.04, up $1.46 or 8.30 percent on a volume of 8.09 million shares. However, in after-hours, the stock declined $0.79 or 4.15 percent to $18.25.