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Citrix shares soar on sale speculation
One slightly-soiled application packager, a steal at US$13bn
Citrix's share price took a sharp step in a pleasant directions after Bloomberg found “people familiar with the matter” willing to say the company is trying to sell itself.
Shares went from a mid-afternoon $79 or so to $87 at around beer-o'clock, before settling to around $85.
In mid-2015 activist investment outfit Elliot Management bought a stake in Citrix, gained a board seat and started agitating for change that culminated in the $1.8bn sale of Citrix's GoTo business to LogMeIn. Citrix has also returned to decent profits and started doing decidedly long-range things like committing to ten years of support for its XenServer products.
The company's also come up with a cunning security plan, built a decent line of mobile application publishing and management tools and become Cisco's preferred supplier of application delivery controllers. The NetScaler it will sell for the Borg is also cooking as a container to improve the performance of micro services.
But if Bloomberg is correct and the company has indeed retained Goldman Sachs to court buyers, those efforts weren't enough to satisfy Elliot. Either that or management has concluded the best way to deliver for shareholders is a sale.
Citrix and Microsoft have been close for decades, but The Register's virtualization desk can't think why such a union would make more sense now than previously. Private equity buyers would also surely beware the company: it's not as if the likes of currently-in-bankruptcy-to-restructure-debt Avaya and BMC show tech companies do well under such stewardship. VMware might fancy the chance to gobble a rival, but would probably be rubbed out on competition grounds and balk at the expected $13bn-plus price based on today's share price.
Which might leave the likes of Huawei standing. The company has an ambition to do more in enterprise software and has already built a virtualization stack, but could perhaps accelerate its development with Citrix's more mature code.
At the time of writing, Citrix's investor relations output is silent on the matter. We will of course keep an eye on things. ®