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Offer now represents a 42% premium to Hollysys' undisturbed closing share price on August 23, 2023 and a 28.6% premium to Hollysys' closing share price on November 3, 2023
Further shareholder support for calling of special meeting obligates Hollysys Board to hold special meeting; removing any question about meeting threshold in the articles of association
Buyer consortium ("the consortium") led by Recco Control Technology Pte. Ltd. ("Recco Control Technology") and Dazheng Group (Hong Kong) Investment Holdings Company Limited ("Dazheng Group") announces today that the consortium has submitted an increased all-cash offer of US$26.50 per share, or approximately US$1.64 billion, to acquire all outstanding shares of Hollysys Automation Technologies Ltd. (NASDAQ:HOLI) ("Hollysys") in a letter sent to the board on November 8, 2023. Members of the consortium also include TFI Asset Management Limited, and Great Wall Capital Co., Ltd, who have entered into a memorandum of strategic cooperation with Recco Control Technology and Dazheng Group in connection with the proposed acquisition of Hollysys. The consortium has engaged in constructive negotiation with lenders and is at the final stage to secure a binding and definitive commitment in support of the offer.
The new US$26.50 per share offer from the consortium represents:
"The consortium's decision to increase our offer to US$26.50 per share is underpinned by our steadfast pursuit of acquiring Hollysys and our motivation to be competitive in a transparent and genuine sale process," commented Mr. Ke Lei, director of Recco Control Technology Pte. Ltd. "We believe that this offer, which is at a compelling premium and is backed by our unquestionable confidence in securing financing, represents an unparalleled opportunity for Hollysys' shareholders to maximize the value of their shares swiftly and with certainty."
The consortium is aware that on November 6, Ascendent Capital Partners – who owns 13.7% of the Company – expressed its support for the special meeting first requested by over 32% of the Company's shareholders to the Board on August 24, 2023. Ascendent has publicly requested that the Board hold the special meeting by December 1, 2023. Shareholders holding 46% of the shares are now demanding that the Board convene the requested special meeting.
This action by Hollysys' largest shareholder appears to be echoing our earlier advocacy and is reflective of shareholders' desire, and fundamental right, to have an independent Board in place that was elected by the shareholders themselves. It also invites the obvious question whether the existing Board has any legitimacy in representing its shareholders after refusing to voluntarily convene the special meeting its own shareholders have requested.
Mr. Ke Lei continued, "Most importantly, with 46% shareholder support now publicly affirmed, it is overwhelmingly clear that the Hollysys Board must immediately move forward with the calling of the special meeting to consider the agenda which was first put to the Board on August 24, 2023. Any further delay by the Board is indefensible. The path forward is clear: a special meeting to elect a Board that truly represents the shareholders' interests is fundamental to ensuring a fair and effective strategic review."
The consortium urges the Company's board of directors to listen to the voice of nearly half its shareholders. The Board must respect the rights of its shareholders and convene the legitimately requested special meeting without further delay. A transparent and thorough sale process should be led by independent directors who represent, and are elected by, Hollysys shareholders. This is the best way to ensure value is maximized for all shareholders.
Posted In: HOLI
