UPDATE 2-Elliott ups bid for Riverbed to $3.36 bln, says co ignored other offers
* Raises offer to $21 per share from $19 per share
* Says company ignored offers from other potential buyers
* Says Riverbed's 10 pct revenue growth target unrealistic
* Co could get offers worth $24 to $25 per share-analyst
* Riverbed shares rise as much as 7 pct
Feb 25 (Reuters) - Hedge fund Elliott Management increased its offer for network gear maker Riverbed Technology Inc by 9 percent to $3.36 billion and said the company had ignored offers from other potential buyers.
Elliott on Tuesday offered $21 per share in cash - a 5.8 percent premium to the stock's closing price on Monday - and again said it could raise its bid if allowed access to the company's books for due diligence.
Riverbed's stock rose as much as 7 percent to $21.19 after Elliott released a letter it sent to the company on Tuesday.
The hedge fund, which has a 10.5 percent stake in the company, said Riverbed continued "to ignore the substantial acquisition interest in the company (at values well above our previous offer) that we know has been brought to the board's attention."
"This is Elliott putting more heat in the kitchen for Riverbed management ... now they really have to make some tough decisions going forward," FBR Capital Markets analyst Daniel Ives told Reuters.
The hedge fund, run by Paul Singer, did not name the potential buyers. Riverbed said it would review Elliott's proposal.
Riverbed on Jan. 15 rejected an offer of $3.08 billion, or $19 per share, from Elliott.
Ives said the company could get offers worth $24 to $25 per share from other buyers given that the maker of software to manage traffic on networks remained "a core strategic asset within the broader technology food chain."
Riverbed's revenue growth has slowed through each quarter of fiscal 2013, and the company forecast growth of 3.5-6.0 percent for the current quarter - the first time in its seven years as a public company that revenue will have grown in single digits.
The forecast is also lower than the company's stated target of 10 percent revenue growth.
The hedge fund on Tuesday called Riverbed's revenue growth target unrealistic, and said the company is "desperately spending money in a frantic effort to rejuvenate its moderating growth".
Riverbed's slowing growth is due to a slowdown in its main wide-area network optimization business and its struggles to integrate Opnet, a maker of software to manage traffic on networks, which it bought in 2012 for about $1 billion.
The hedge funds' offer include a "go shop" provision that allows Riverbed to solicit other offers.
Elliott is known for publicly agitating for a sale or a board shakeup in companies in which it invests, pushing stock prices higher.
The hedge fund has also trained its guns on Riverbed's rival Juniper Networks Inc, and has asked the company to buy back shares, start paying a dividend and consider slimming down. Juniper complied last week.
Finland's Nokia is also considering buying Juniper, German's Manager Magazin Online reported last week, citing unidentified sources.
Riverbed's shares were trading up 4.3 percent at $20.71 later in the session. The stock is up roughly 31 percent since Elliott first disclosed a stake in the company in November.