Elliott: Good Response For Juniper Shareholder Value Plan

(RTTNews) - Hedge fund Elliott Management, which owns a 6.2% stake in Juniper Networks Inc. (JNPR), on Monday came out with a statement about its investment in the computer networking gear maker, and in which it is pressing for a three-pronged shareholder value plan, comprising cost cuts, return of cash to shareholders and optimization of its product portfolio.

"Elliott is extremely gratified by the absolutely overwhelming support we have received from fellow Juniper shareholders, sell-side analysts and the broader investing community for the Shareholder Value Plan we have urged Juniper to adopt," said Jesse Cohn, Portfolio Manager at Elliott.

"When we set out to suggest a plan for Juniper, we talked with fellow shareholders and leading analysts to develop a reasonable set of steps that could generate tremendous value."

Elliott said it also recruited a team of executives who are excited about Juniper and who have the operational skills and deep industry experience to help ensure that the shareholder value plan becomes a reality.

The hedge fund said that it is its strong preference to work with Juniper to achieve the most important goal of ensuring implementation of a plan that is fully consistent with the specific value-maximizing steps outlined in the shareholder value plan.

In January, Elliott urged Juniper to return cash to shareholders, cut costs and optimize its product portfolio to unlock significant value. The hedge fund wants Juniper to slash operating costs by $200 million in 2014, with its research funds spent on key businesses.

Elliott also wants Juniper to announce a new $3.5 billion share buyback and dividend program, consisting of an immediate $2.5 billion repurchase in 2014, a $1 billion repurchase in 2015, and a $0.125 per share quarterly dividend.

The hedge fund further urged Juniper to consider shedding its security and switching segment.

These measures, Elliott believes, can lead to a price of $35-$40 per Juniper share, which up to 70 percent above the current price.

Elliott also exhorted Juniper to restrain its acquisition program while it focuses on execution in existing businesses.

Meanwhile, Elliott has been preparing a slate of directors and faces a deadline of February 23 to nominate them for Juniper's board.

Juniper share are trading at $26.57, down $0.04 or 0.15%, on a volume of 5.7 million shares on the NYSE.