RealD Shares Spike on Buyout Offer

Starboard Value says it would pay a 29 percent premium to take the 3D company private

Shares of RealD, the movie industry's leading provider of 3D technology, surged 24 percent in after-hours trading on Wednesday after a hedge fund disclosed it has purchased 10 percent of the outstanding shares and has offered to buy the entire company.

Starboard Value said it would pay $12 a share for RealD, which is 29 percent higher than where the stock closed on Wednesday. After the closing bell, though, shares advanced to $11.52.

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The disclosure from Starboard Value, an investment company with about $3 billion in assets, comes just days after the same entity caused shares of both AOL and Yahoo to rise simply by suggesting the two Internet companies should merge.

RealD has fallen on hard times lately as more and more consumers decide they'd rather not pay several more dollars per ticket to see a 3D version of a movie. In 2011, the stock traded above $30. In August, though, the company reported a 6 percent decline in quarterly revenue, and last year it laid off about 20 percent of its staff.

"Starboard stated it does not believe that the Issuer is best positioned to execute against its future opportunities as a public company," RealD said in a filing on Wednesday. "Starboard further stated that the near-term financial performance of the Issuer may suffer given the challenged release schedule for 3D films."

RealD has about 25,600 screens in 3,000 U.S. theaters and 3,000 international theaters.