Nutanix jumps 24% on report it's exploring sale after takeover interest (update)
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Update 1:40pm: Adds comment from Nutanix holder Legion.
Nutanix Inc. (NASDAQ:NTNX) soared 24% on a report the cloud-computing firm is exploring a sale after getting takeover interest.
Nutanix (NTNX) expects to target private-equity and strategic buyers, according to a WSJ report on Friday. There's no certainty a transaction will occur and a buyer will likely need to pay a significant premium to Nutanix's nearly $5 billion market cap.
The WSJ news comes after some corporate governance changes announced late last month spurred some renewed takeover speculation. One of the biggest announcements was the declassification of the company's board structure and the elimination of the super majority vote requirement. Nutanix activist investor Legion Partners championed the corporate governance changes at the time. 
Nutanix holder Legion said in a statement on Friday that the potential sale report highlighted that the "companyâs trading price has for some time not appropriately reflected its full value" and the investor believes that a strategic buyer would be the ideal candidate for the company. 
"We encourage the board to fully explore all options in order to achieve the best outcome for all stockholders and we will be observing the process closely" Legion said in the statement.
Needham analyst Michael Cikos last Monday in a note said he sees a potential PE buyer as Bain Capital, given Bain's investment in the company. Possible strategic buyers include Cisco (CSCO) and HP Enterprise (HPE) and cloud players such as Amazon's (AMZN) AWS and Google (GOOGL) Cloud. The analyst highlighted that Nutanix former CEO reportedly turned down bids from Cisco and HPE in 2016 before Nutanix (NTNX) had its IPO.
The latest speculation comes after Nutanix (NTNX) shares soared on May 23 after Dealreporter highlighted the company's decision to eliminate its dual-class structure and speculated Bain could potentially look to take the company private as its agreement with NTNX was set to expire. Recall in August 2020, private equity firm Bain agreed to invest $750 million in Nutanix (NTNX).