WAN optimization provider Riverbed Technology (RVBD) nixed an unsolicited $3.08 billion bid from activist investor and 10.5 percent shareholder Elliott Management, saying the offer undervalued the company.

Elliott’s $19 per share offer represented a slight premium on the value of Riverbed’s shares as traded prior to the bid but in the ensuing week the stock has traded at or above the buyout price. Riverbed’s stock has remained stagnant for the better part of a year as its sales slowed. The company’s market cap currently stands at $3.26 billion.

Riverbed said in a statement that its board “unanimously determined not to pursue” Elliott’s offer, contending it wasn’t in the “best interests of shareholders.”

“While the Board will carefully review any credible offer made to acquire the company, any such offer must deliver value to our shareholders in excess of what we believe will be created as we execute on our growth plans and capitalize on the significant investments we have already made in that regard,” said Jerry M. Kennelly, Riverbed chairman and chief executive.

Elliott Management, which is among the world’s biggest hedge fund firms with $23.9 billion in assets, bought an initial position in Riverbed last September and has since repeatedly said it believes the company is “significantly undervalued,” pressuring it to overhaul its strategy. 

Immediately prior to Riverbed’s board meeting on the Elliott offer, the fund issued a long letter in support of its bid, contending that a majority of shareholders, industry analysts and observers supported it—going so far as to warn that if Riverbed rejected the deal its shares could drop 25 percent or more. Riverbed referenced the Elliott letter in an SEC filing.

Big Q4 Beats Guidance

Separately, Riverbed said it expects its Q4 2013 revenue to come in at $284 to $285 million, significantly higher than its $270 million to $276 million guidance, and non-GAAP earnings of 30 cents to 31 cents, also above its projected 26 cents to 27 cents a share.

“Sales in the fourth quarter exceeded our expectations across all major product lines and geographies, demonstrating strong ongoing demand and the differentiated value that we deliver to customers across our full product portfolio,” said Kennelly.

The company said it expects Q1 2014 sales at $262 million to $268 million and non-GAAP earnings of 21 cents to 23 cents per diluted share.