Following Spinoff of Goto To LogMeIn(LOGM), Citrix(CTXS) Puts Itself Up For Sale, Stock Spikes On Rumor

Citrix Systems(CTXS) stock rose 6.8% yesterday, almost all towards the end of trading, as rumors circulated that the company had hired Goldman Sachs to find a buyer.

The Fort Lauderdale, Florida-based company hired Goldman Sachs Group Inc. to sound out buyers including private equity firms, said the people, who asked not to be identified because the information isn’t public. Interest has been limited so far as Citrix’s large market valuation means buyout firms would have to team up to fund a bid, complicating any possible deal, the people said.

An increase in the company’s market value over the past year is also making it difficult for private equity firms to offer a premium for Citrix, they said.

The shares rose 6.8 percent to $84.93 Monday, valuing the company at about $13.3 billion. The stock climbed more than 30 percent in the 12 months through March 10, despite management warning in January that they’re maintaining a “conservative outlook” on the next four quarters.

A spokeswoman for Goldman Sachs declined to comment. Representatives for Citrix didn’t immediately respond to requests for comment.
Activist hedge fund Elliott Management won a Board seat in 2015 and has pushed to unlock value. Earlier this year, Citrix spun off its GoTo division which merged with LogMeIn(LOGM) in a Reverse Morris Trust transaction. Now, some observers see Elliott’s hand again in pushing for a sale of the company. As Bloomberg noted, Citrix’s size will limit the number of potential buyers, but we may still see a transaction announced in the coming months.
Disclosure: The author holds no shares of any stock mentioned


  • 💬 Inelegant Investor