Activist investment firm Elliott Management Corp. boosted its offer to buy Riverbed Technology Inc. by 11 percent to $21 a share, or $3.36 billion, after the network-equipment maker rejected an earlier bid as too low.

New York-based Elliott and its affiliates own about 10.5 percent of Riverbed, making it one of the company’s largest shareholders. The investor sent a letter to Riverbed’s board today, saying the new bid represents “undeniable premium value” above the company’s share price before any offers.

Riverbed’s board has ignored “substantial” acquisition interest, Elliott said. Last month, Riverbed spurned Elliott’s bid of $19 a share, or $3.08 billion, and released preliminary fourth-quarter results that showed its business was gaining momentum. Riverbed is focusing on a strategy to increase value for “all of our shareholders,” the San Francisco-based company said in a statement at the time.

“We will not increase our offer any further in the absence of private diligence,” Elliott wrote in today’s letter. “As a sign that the board is serious about its commitment to remain open to value-maximizing offers, we again request that the company provide us with an appropriate confidentiality agreement and allow us to commence our due diligence review immediately.”

Riverbed shares gained 5.1 percent to $20.87 at 1:55 p.m. in New York. Prior to Elliott’s first offer, the stock was trading at $17.85. The shares fell 8 percent last year, compared with a 30 percent gain in the Standard & Poor’s 500 Index.

Shawn Dainas, a Riverbed spokesman, didn’t immediately return a phone call seeking comment.

Private Equity

Elliott may be raising the offer to force Riverbed to more seriously consider a buyout from other bidders, such as a private equity group, said Dan Ives, an analyst at FBR Capital Markets.

“This is Elliott moving the process along, to make sure that Riverbed management takes out the earplugs, and listens to other offers,” said Ives, who rates the shares the equivalent of a hold. He said most investors peg Riverbed’s fair value at $24 to $25 a share. “Elliott isn’t going anywhere. This is them putting more heat in the kitchen.”

Elliott is known for acquiring large stakes in companies and pushing for changes. It scored a victory in its activism last week when Juniper Networks Inc. announced plans to return at least $3 billion to shareholders. In January, Elliott started pressuring Juniper to make changes.

Elliott built up its Riverbed stake last year. In November, the firm began pressuring the company to review its strategy and capital structure, calling the stock “significantly undervalued.” Riverbed then adopted a stockholder-rights plan and started working with Goldman Sachs Group Inc. to study strategic options.