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support for appraised intrinsic value realization

of stock investments in

Riverbed Technology, Inc.



AVR Status

Riverbed reported voting approval on March 5, 2015 by 77.57% of outstanding shares for the company's agreement to be acquired by Thoma Bravo, with participation of the Ontario Teachers’ Pension Plan, at a price of $21.00 per share in cash, as presented in a January 20, 2014 Definitive Proxy Statement. Based on its review of suitability, the Forum will offer support of shareholders wishing to consider appraisal rights for realization of the company's intrinsic value.



For a printable version of this report, click here.


Proposed buyout review

Riverbed Technology, Inc. (RVBD)

Record date for voting rights:

January 20, 2015

Shareholder vote:

March 5, 2015

Proposed buyer:

Thoma Bravo (with participants)

Value of transaction:

$3.6  billion



In another “forced sale” pressed by an activist, Riverbed Technology reported on December 15, 2014 that it had agreed to be acquired by the private equity firm Thoma Bravo (with participation of the Ontario Teachers’ Pension Plan) at a price of $21.00 per share.[1] It should be noted that this price simply matches a February 2014 offer by the activist, Elliott Management, which the company’s board had determined at the time “continued to undervalue Riverbed relative to its value as an independent company,” and that the alternative agreement is with private equity investors that have stated their intent to continue support of existing managers and their strategies.[2] Public shareholders are therefore presented with a choice between management’s auction price of the stock and an appraisal of the long term enterprise value that management and Thoma Bravo are buying.

The situation appears to satisfy the three screening criteria for the Forum’s “Appraised Value Rights ("AVR") Management” support of shareholders considering this alternative:


Buyer – The proposed transaction is a “standalone” buyout, without any benefits of a business combination that might justify a buyer’s offering more than the intrinsic value of the company. It is therefore unlikely that the buyer, as an experienced professional investor with access to insider information, will be able to explain to the court – and also to its equity partners and lenders – that the price it offered to pay was more than of its view of the company’s intrinsic value. There is little risk that a court appraisal would vary from past patterns for such standalone buyouts.[3]


Amount – The size of the buyout is in a range that could justify public registration for quoted AVR trading and “Level 1” pricing if holders of a significant portion of the company’s stock demand appraisal and request support of liquidity. In interest in liquidity does not justify public registration, it in any event likely that the size of this transaction will result in a sufficient volume of appraisal demands to support market activity with “Level 2” pricing of AVR investments.


Jurisdiction – The company is incorporated in Delaware, the state that provides a well-defined and relatively predictable process for appraisal rights.

Since there appears to be no controversy about the proposed transaction, particularly with the activist Elliott’s support, it is likely that it will be approved by the March 5, vote. The Forum therefore welcomes requests of record date shareholders for reservations of Riverbed AVR Management.

GL – January 21, 2015 (update of preliminary December 16, 2014 review)

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Telephone: 212-605-0335






The project supporting investor interests in Riverbed Technologies, Inc. is being conducted by the Shareholder Forum for the benefit of Participants that have reserved Appraised Value Rights ("AVR") Managment, subject to conditions including standard Forum policies that each Participant is expected to make independent use of information obtained through the Forum and that participation is considered private unless the Participant specifically authorizes identification.

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