Activist fund Elliott Management and its founder Paul Singer have had an up and down couple of weeks. Last week, it was bad news when the Lee family-backed Samsung merger deal was approved despite Singer and Elliott’s vociferous disapproval. Things have started off much better for Elliott this week, however, as target firm Citrix Systems announced on Tuesday that CEO Mark Templeton would retire. The cloud services provider also announced it was giving activist shareholder Elliott Management a board seat.
In its statement, Citrix noted that Elliott, who altogether owns close to 7.5% of Citrix’s outstanding shares, has agreed to the usual standstill, voting and other provisions for at least a year.
Of note, Templeton will continue to serve as president and CEO until a successor is determined in the next few months.
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Citrix shares were up around 4% in after hours trading on Tuesday.
Details on Elliott – Citrix deal
Earlier this summer, Elliott argued that Citrix should consolidate, reduce costs and buy back shares to compensate for years of poor performance.
Tuesday’s announcement specified that Elliott’s Jesse Cohn would join the board at Citrix as a replacement for Asiff Hirji who was stepping down immediately.
In addition, the firm has agreed to appoint another independent board member who is agreeable to both Citrix and Elliott to replace a (to be named) current board member when appointed.
In a related development, Citrix noted the BoD has created an operations committee to work closely with management towards improving the firm’s margins, profitability and capital structure.
New director Cohn and the mutually-agreed-upon new director will both be members of the operations committee, which will be chaired by Citrix director Robert Calderoni.
Citrix is also exploring the sale of its “GoTo” product line. The statement noted: “The strategic alternatives review for this business could result in, among other things, a possible sale or spin-off transaction.”
The tech firm had already announced it was looking to sell its “ByteMobile” business, and Tuesday’s statement highlighted that “Citrix is currently in active discussions with third parties regarding a potential sale.”