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Reiterates All-Cash Offer of US$26.50 Per Share while Noting Board is Negotiating a Deal without the Support of Shareholders
Special Meeting Must Happen Prior to Definitive Deal, Any Deal Announced Prior to Special Meeting Will Not Carry the Clear Support of Shareholders
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") today reiterates its all-cash proposal of US$26.50 per share for Hollysys Automation Technologies Ltd. (NASDAQ:HOLI) ("Hollysys"). This statement comes amidst an announcement of the board of directors ("Board") of Hollysys that has indicated that the special meeting ("Special Meeting") of shareholders requested by certain shareholders on August 24, 2023 will be held in the week of January 22, 2024 following a persistent campaign by the Board to deny shareholders basic rights. 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 Board continues to take actions that impede or disregard the basic rights and wishes of the shareholders. Announcing the Special Meeting will be held in the week of January 22, 2024 while indicating that the Board hopes to execute a merger agreement by mid-December 2023 is a direct disregard for what the shareholders want and renders the Special Meeting futile. Shareholders are entitled to choose the board of directors, in whom they have trust and confidence, that they wish to run the sales process and the current Board is denying shareholders this basic right at one of the most important times in the Company's history.
Furthermore, as the leading bidder for Hollysys with a bid of $26.50 per share, we have to wonder if the Board is, at the expense of shareholders, seeking once again to create a situation that is more favorable for a management buyout rather than supporting a higher third party bid. Any attempt by the Board to prematurely seal a deal potentially undermines the maximization of shareholder value.
To ensure the sale process is one that is legitimate and maximizes shareholder value rather than one which favors management, the Board must hold the Special Meeting before any binding agreement is reached.
Advisors
UBS AG Hong Kong Branch1 is serving as financial advisor to leaders of the consortium, Recco Control Technology and Dazheng Group. Sullivan & Cromwell LLP and DLA Piper are United States counsels to the consortium. Conyers Dill & Pearman is advising the consortium on BVI law.
Posted In: HOLI
