Elliott Management (7.1% holder) sends letter to Board; sees company reaching $90-100+/shr by the end of 2016 if engages on a plan; suggests exploring options for GoTo and NetScaler
We believe that Citrix can achieve a stock price of $90 $100+ per share by the end of 2016. This outcome which represents an increase in stockholder value of approximately 50% is achievable because Citrix has leading technology franchises in attractive markets but has struggled operationally for years. As a result, today Citrixs operations and product portfolio represent an opportunity for improvement of uniquely significant magnitude.
The purpose of todays letter is to a) introduce ourselves, b) preview some of the extensive work we have done to validate the $90 $100+ per share opportunity, and c) respectfully request a meeting with the Companys board of directors (the Board) to share our detailed thoughts about how to improve Citrix for the benefit of stockholders, employees and customers.
Spin or Sale of the GoTo Franchise: While we recognize the broad notion of empowering a mobile workforce, this businesss go-to-market strategy, product development roadmap and end-market are absolutely distinct from the core of Citrix. GoTo is an attractive business with scale in its market, and we have confidence that it can realize significant value through several alternative transaction structures, including a sale or a spin. We also further believe that core Citrixs management can create significantly more value for stockholders by focusing on operational execution rather than attempting to oversee the GoTo franchise.
Exploration of Strategic Alternatives for NetScaler: We are not explicitly advocating for a sale of NetScaler, but we believe the sale option should be seriously explored to assess potential strategic buyer interest and valuation, which we believe may be robust. NetScaler is an excellent business, and its ADC technology is an industry-leader; however, we believe Citrix has overly relied on the virtualization cross-sell, resulting in significant under-penetration in non-virtualization use-cases and within the telco vertical. We believe other strategic owners can accelerate NetScalers growth through greater scale and unique customer relationships. It is critical for the Board to consider whether Citrix is the parent company best positioned to maximize NetScalers value.