Shares of Citrix Systems Inc. [CTXS] is up more than 7% today on rumors that the virtualization software vendor could be a takeover target. Citrix has been considered more of a buyer than an acquisition candidate, having last year closed a $500 million acquisition of XenSource Inc.

But now IBM Corp. [IBM] and Cisco Systems Inc. [CSCO] are sniffing around the company, according to the rumor du jour. Avian Securities analyst Jeff Gaggin says in a research note today that Citrix has developed a virtualization management offering that has become a "real threat" to rival VMWare Inc.

Following Citrix's XenSource deal, speculation arose that Microsoft Corp. [MSFT] might take an interest in the newly enlarged company, mainly because of the long-standing marketing partnership between the two companies. But Gaggin argues that Microsoft prefers keeping its relationship with Citrix at the partnership level, being distracted with its attempt to takeover Yahoo! Inc. [YHOO] and the development of its own internal virtualization offering.

Citrix shares got a boost last week too, after Goldman, Sachs & Co. analyst Sarah Friar lauded the company's product line and described the valuation of its shares as "compelling." But at $6.84 in early afternoon trading Tuesday, the shares were still well off their year-high of $42.90 reached in November, which might make Citrix a compelling target indeed. -- Olaf de Senerpont Domis

See September 2007 post from Tech Confidential
See August 2007 post from Tech Confidential
See August 2007 story from TheDeal.com