UPDATE 2-Blue Coat to buy Packeteer for $268 mln
(Recasts; adds details, background, analyst comments, share movement)
By Sayantani Ghosh
BANGALORE, April 21 (Reuters) - Internet monitoring equipment maker Blue Coat Systems Inc BCSI.O said it would buy rival Packeteer Inc PKTR.O for about $268 million in cash to gain a firmer foothold in the WAN optimization market.
Blue Coat's $7.10-a-share offer is 15 percent more than the WAN (wide area network) hardware maker's closing share price on Friday. On Monday, Packeteer shares rose as much as 13 percent to $7.00 on Nasdaq.
WAN optimization devices speed applications across such networks without companies or organizations requiring to upgrade bandwidth.
The deal comes a month after Packeteer rejected hedge fund Elliott Associates' offer to buy the company for $5.50 a share, valuing it at about $200.6 million.
But the prospect of a bidding war was diffused as Blue Coat said Elliott would end its tender offer for Packeteer. The hedge fund will sell its 9.9 percent stake in the company to Blue Coat at the deal price.
"I think it's an expensive deal," Manuel Recarey, an analyst from Kaufman Bros Equity Research, said in reference to Blue Coat's offer.
When Elliott had made its bid for Packeteer, Recarey had said he did not expect other bidders as the hedge fund's offer was at a premium to the company's peers. Continuación...