Shares of Citrix Systems (NASDAQ:CTXS) are trading higher today by over 12% after it was announced that Elliott Management and Vista Equity Partners were considering a joint bid for the company. However, talks are still in the early stages, according to sources close to the matter.
Furthermore, this news come after Elliott Management acquired a 10% stake in CTXS stock in September. The activist investor has a long history with Citrix Systems. In 2015, Elliott Management embarked on a campaign to help better management’s financial decisions. The campaign was successful and Elliot partner Jesse Cohn received a seat on the board of directors. However, shares of CTXS stock have increased 93% since 2015, vastly underperforming the S&P 500’s return of 122% during the same period.
Vista Equity has dealt with Citrix Systems in the past as well. In 2020, the investment firm sold Wrike, a company it had invested in, to Citrix Systems for $2.25 billion.
With that said, investors are actively waiting for more updates on the potential joint bid. Let’s dive into the details surrounding the latest CTXS stock news.
CTXS Stock: 6 Things to Know About a Potential Joint Bid
- This isn’t the first time Citrix Systems has tried to sell itself. In 2017, the company engaged in active discussions with Bain Capital and Thoma Bravo. Discussions fell through after disagreements over valuation.
- Vista Equity may be considering using its portfolio company, Tibco, as part of the transaction. No further details were given. Vista Equity acquired Tibco in 2014 for $4.3 billion. It was reported earlier this year that the investment firm was looking to sell Tibco for at least $7.5 billion.
- In a research note, Bloomberg intelligence analysts Woo Jin Ho and Mandeep Singh praised the potential business transaction: “Citrix could make its cloud transition more aggressively and with limited public-market scrutiny if Elliott Management and Vista Equity Partners make an acquisition bid.”
- Elliott Management is a highly respected activist fund. Past investments include Twitter (NYSE:TWTR), Comcast (NASDAQ:CMCSA), AT&T (NYSE:T) and Samsung . As of June 30, the fund manages $48 billion in assets.
- Vista Equity is no stranger to the investment world either. Vista Equity manages $81 billion in assets under management (AUM).
- Last month, Morgan Stanley analyst Sanjit Singh lowered his price target for CTXS stock to $85.
On the date of publication, Eddie Pan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
