Packeteer shares up after spurning Elliott offer

(Reuters) - Shares of Packeteer Inc PKTR.O rose 15 percent Wednesday, a day after the networking hardware maker rejected a hostile bid from hedge fund Elliott Associates LP, saying it undervalued the company.

In March Elliott Associates and its affiliates offered to buy Packeteer for $5.50 a share in cash, valuing the company at about $200 million.

In a statement, Packeteer said that it is in talks with various third parties and believed it could strike a deal that was greater than Elliott's offer.

The company, whose rivals include F5 Networks (FFIV.O: Quote, Profile, Research), Blue Coat Systems (BCSI.O: Quote, Profile, Research) and Aruba Networks (ARUN.O: Quote, Profile, Research), also said it adopted a shareholder rights plan, commonly called a poison pill, with a 15 percent trigger.

In a response issued on Thursday, Elliott and its affiliate, which collectively hold a 9.8 percent stake in Packeteer, said it was disappointed by the company's decision to reject the offer. Elliott added that it stood behind its bid for the company.

Shares of the company were up 14 percent at $5.96 in afternoon trade on Nasdaq. They had earlier touched an intra-day high of $6.02, but are still way below their 52-week high of $12.74 in April last year.

The company's stock has been hit hard over the past year as it struggles against stiff competition amid concerns that an economic slowdown in the United States may hurt future growth.

(Reporting by Savio D'Souza in Bangalore; Editing by Anil D'Silva, Jarshad Kakkrakandy)