A consortium, led by Dazheng Group Acquisition Limited, has reiterated its commitment to acquire Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) at a premium price of $29.50 per share, which represents an 11.3% premium over the competing bid from Ascendent Capital.
The consortium, comprising Dazheng Group and TFI Asset Management Limited, aims to provide Hollysys shareholders with a more secure and lucrative deal.
To back their offer, the consortium has secured substantial financial commitments that exceed industry standards.
They have obtained a $1.05 billion debt commitment from a prominent PRC-based bank and $800 million in equity commitments.
These commitments are backed by strong evidence of funding, including bank statements and formally executed equity commitment letters, ensuring a higher degree of closing certainty compared to Ascendent’s proposal.
Negotiations between Hollysys and the consortium commenced on January 28, 2024, as acknowledged by the Special Committee in a proxy statement supplement.
The consortium believes that the Special Committee’s recognition of their proposal implies its potential superiority over Ascendent’s bid.
However, the Special Committee has not recommended postponing the Extraordinary General Meeting (EGM) scheduled for February 8, 2024, to evaluate the consortium’s offer.
Consequently, the consortium is urging shareholders to vote AGAINST the Ascendent transaction to secure the opportunity to exit at the attractive price of $29.50 per share.
Leading proxy advisors, Institutional Shareholder Services (ISS) and Glass Lewis, have recommended that shareholders reject the Ascendent transaction due to concerns about the sales process and the actions of the Special Committee.
The consortium emphasizes that rejecting the Ascendent deal will not result in a termination fee for Hollysys and argues that it is in the best interest of shareholders.
Additionally, the consortium highlights the importance of not voting in favor of the Ascendent transaction to preserve dissenting and appraisal rights under Section 179 of the British Virgin Islands Business Companies Act.
This reminder is particularly crucial because Hollysys’s proxy statement lacks information on these rights.
These developments are based on a press release from Dazheng Group Acquisition Limited, signaling their unwavering commitment to acquire Hollysys Automation Technologies Ltd. at a premium price, backed by substantial financial commitments and strong endorsements from proxy advisors.