(Adds Juniper's response, details, updates share move)
Jan 13 (Reuters) - Juniper Networks Inc shareholder Elliott Management Corp urged the network equipment maker to buy back shares, cut costs and consider exiting some businesses to boost shareholder value.
Juniper shares rose 10 percent to $25.95, their highest in more than two years, in early trading on the New York Stock Exchange on Monday.
Elliott, which owns 6.2 percent of Juniper, said the company should repurchase $3.5 billion of shares.
The hedge fund, run by Paul Singer, is known for publicly agitating for a sale or a board shakeup in companies in which it invests, pushing stock prices higher.
Elliott last week mounted a $3.08 billion takeover bid for Juniper rival Riverbed Technology Inc, a move analysts said was likely to trigger higher bids.
The fund said Juniper could reduce its operating expenses by about $200 million annually in 2014 by focusing its research and development budget on its main business.
Elliott urged Juniper to review its security and switching businesses, noting that the company was losing market share.
Pushing for cost cuts, it noted that Juniper's average base salary of $159,990 for software engineers was higher than most big technology companies including Google Inc, LinkedIn Corp and Yahoo Inc.
"We believe these value initiatives can collectively result in a stock price of $35-$40 per share," Elliott said in a statement. (http://link.reuters.com/puc95v)
Juniper spokeswoman Cindy Ta said in an email that the company was "always open to constructive input toward the goal of enhancing shareholder value."
Juniper supplies routers and switches to telecom companies such as Verizon Communications Inc and AT&T Inc.
(Reporting by Neha Alawadhi and Lehar Maan in Bangalore; Editing by Saumyadeb Chakrabarty)