Citrix Makes Final Sale Push

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Company makes final attempt to sale itself as a single entity before activist investor forces asset sell-off

Cloud specialist Citrix Systems is reportedly making a last ditch attempt to sell itself as a single entity, as the management team faces internal pressure from an activist investor.

That pressure is coming from activist hedge fund Elliott Management, and if the company doesn’t manage to find itself a buyer for the entire company, it faces a potential asset sell-off.

Activist Investor

Reuters reported that the latest ditch sales attempt comes after Elliot Management secured itself a seat on its board of directors in July. That same month Citrix said it would explore strategic alternatives for its GoTo family of products.

Sources told Reuters that a sale for its assets had not started yet as the company wanted to see if it can still sell itself at a satisfactory valuation.

citrixCitrix has reportedly been in talks with a number of buyout firms and has also reached out to firms such as Dell and private equity firm Silver Lake Partners LP. Dell of course went private two years ago after it faced similar pressure from another activist investor, Carl Ichan.

If Citrix cannot find itself a deal for the entire company at the right price, it will not just start selling its GoTo products, but will explore options for other asset sales as well.

Reuters said that the sources asked not to be identified because the deliberations are confidential. It also reported that Citrix, Dell and Silver Lake have declined to comment on the matter.

For while now some have questioned Citrix’s strategic approach to the market. For a relatively small company based in Santa Clara, California, Citrix has an incredibly broad product set including desktop virtualisation, server virtualisation, cloud and mobile management/orchestration, network optimisation, system on a chip technology, and plenty of other products including security.

Elliot Management has reportedly being pressuring Citrix to sell some units, cut costs and buy back shares. In addition to the GoTo business, Elliott reportedly has called for Citrix to explore the sale of NetScaler.

Formidable Opponent

Elliot Management is a formidable opponent for many management teams. Juniper Networks was another company that felt the heat from Elliot, and in July 2014 it sold its Junos Pulse mobile security business as part of a restructuring program.

BMC Software put up a stiff fight but eventually completed a privatisation process, after it agreed to be acquired by a private investor group. Elliott Management was one of the buyers.

Elliot Management has also turned the screws on EMC, after it said that EMC should sell off VMware or consider other possible merger opportunities.

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Author: Tom Jowitt
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