Blue Coat to buy Packeteer for $268M

Blue Coat Systems Inc., which makes Internet monitoring equipment, said Monday it agreed to acquire Packeteer Inc. in a deal that values the company at $268 million.

Sunnyvale-based Blue Coat (NASDAQ:BCSI) will pay $7.10 a share for Cupertino-based Packeteer (NASDAQ:PKTR) and will finance the acquisition with its own funds and a convertible share offering of $80 million.

The deal, which is a 15 percent premium over the hardware maker's closing price on Friday, is expected to close in the second quarter.

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Earlier this month Packeteer's board unanimously rejected a $5.50 per share offer from investment company Elliott Associates LP, saying the offer "is contrary to the best interests of the company's stockholders."

In late March two hedge funds under the Elliott's umbrella launched a $200.8 million hostile buyout attempt for Packeteer.

The offer was a 6 percent premium to Packeteer's closing stock price of $5.19 the day before the offer was made, and a 42 percent premium to the $3.86 closing price on March 4, the final trading day before the proposal.

Blue Coat shares rose on the news Monday, closing the day at $20.25. Packeteer stock shot up more than 13 percent to close the day at $6.99.