Elliott Management Urges Juniper To Repurchase Shares, Reduce Operating Expenses

(RTTNews) - Elliott Management Corp., which owns 6.2% of the common stock of Juniper Networks Inc. (JNPR), outlined three-pronged plan, which it believes can lead to a stock price of $35-$40 per share. The three-pronged plan are cost realignment plan, capital return plan, and product portfolio optimization.

Elliott said that Juniper should reduce operating expenses by $200 million in 2014 by pursuing highly achievable operational efficiencies, focusing its R&D budget on its main business and eliminating lower risk-adjusted ROI projects.

Elliott also said Juniper should announce a new $3.5 billion share repurchase and dividend program, consisting of an immediate $2.5 billion repurchase in 2014, a $1.0 billion repurchase in 2015, and a $0.125 / share quarterly dividend.

According to Elliott, Juniper has spent over $7 billion on acquisitions, which amounts to 111% of its enterprise value at the time Elliott began to buy material amounts of the Company's stock. Juniper should give strong consideration to halting its acquisition program while it focuses on execution in its existing businesses.

Elliott noted that Juniper's board should undertake a strategic review of the security business, which is underperforming and now lacks a leader after Bob Muglia's recent resignation.

Elliott said that Juniper has an opportunity to deliver long-overdue value to shareholders through the three-pronged plan, which Elliott believes can lead to a stock price of $35-$40 per share. The stock price is up to 70% above the current price.