The Special Committee of Hollysys Automation Technologies Ltd. (HOLI) reiterated its unanimous recommendation that shareholders vote for the acquisition of the company by a buyer controlled by Ascendent Capital Partners, a private investment firm headquartered in Hong Kong. But, the Committee concluded that Dazheng proposal is not superior to the Ascendent acquisition.
The Special Committee does not have confidence in the certainty of Dazheng's equity financing nor its ability to successfully close a transaction, given its constantly changing equity consortium structure, including the last-minute introduction of a new member that is purportedly now its primary source of equity funding but with no proper financial arrangement to provide certainty of funds. Moreover, Dazheng proposed an escrow structure entirely onshore and denominated in RMB, Hollysys said in a statement.
The Special Committee believes that it is imperative to work toward closing the acquisition by Ascendent and recommends that shareholders vote FOR the Ascendent acquisition at the February 8, 2024 extraordinary general meeting.
According to Hollysys, the Special Committee strongly disagrees with the recommendations of ISS and Glass Lewis regarding the transaction with Ascendent. Neither ISS nor Glass Lewis provided any judgement on the value of the Ascendent offer.
In December 2023, Hollysys Automation Technologies announced that it would be acquired by Ascendent Capital Partners. The all-cash transaction is valued at about $1.66 billion, and according to the agreement, Ascendent will acquire all the outstanding shares of Hollysys that it does not already own for $26.50 in cash per share.
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