Hedge fund Elliott Management reaffirmed its $3.36 billion offer for network gear maker Riverbed Technology Inc RVBD.O after being rebuffed twice, saying it remained "extremely interested" in acquiring the company.
Riverbed's shares rose as much as 2.5 percent in early trading on Tuesday but reversed course later to trade down less than a percent at $18.74.
The stock had touched a high of $22.76 in February after Elliot raised its initial bid by $2 to $21 per share. Riverbed rejected the offer, saying it undervalued the company.
"Shareholders clearly still expect that the board will eventually do the right thing by engaging with Elliott and other potential buyers, but unfortunately our repeated requests for access to diligence materials have been ignored," Elliott portfolio manager Jesse Cohn said in a statement on Tuesday.
Elliott had earlier said it could raise its offer of $21 per share if allowed access to Riverbed's books.
"This continues to be a game of cat and mouse between Elliot and Riverbed's board," FBR Capital Markets analyst Daniel Ives said.
"We continue to believe fair value is in the mid 20's for Riverbed from a financial buyer," he said.
The stock has an intrinsic value of $14.53 based on anticipated growth over the next 15 years, according to Thomson Reuters StarMine data. It closed at $18.86 on Monday on the Nasdaq.
(Additional reporting By Abhirup Chatterjee in Bangalore; Editing by Saumyadeb Chakrabarty)