Dazheng Group maintains Hollysys acquisition offer at $29.50 per share By Investing.com

© Reuters.

HONG KONG – A consortium led by Dazheng Group Acquisition Limited has reaffirmed its intention to acquire Hollysys Automation (NASDAQ:) Technologies Ltd. (NASDAQ: HOLI), offering shareholders a premium over the rival Ascendent Capital bid. The consortium’s firm offer of $29.50 per share represents an 11.3% premium to Ascendent’s offer, which aims to provide Hollysys shareholders with more certainty about closing the deal.

The consortium, which includes Dazheng Group and TFI Asset Management Limited, secured a financial commitment exceeding industry standards with a debt commitment of US$1.05 billion and an equity commitment of US$800 million from a prominent China-based bank. These commitments are backed by strong proof of funds, including bank statements and formally executed equity commitment letters, providing final certainty that what the consortium is claiming is superior to Ascendent’s proposal.

Negotiations between Holsys and the Consortium began on January 28, 2024, as acknowledged by the Special Committee in its Proxy Statement Supplement. The consortium argues that the special committee’s recognition of its proposal suggests superiority, or potential superiority, over Ascendent’s bid. However, the Special Committee did not recommend postponement of the Extraordinary General Meeting (EGM) scheduled for 8 February 2024 to consider the consortium’s proposals. As a result, the consortium is urging shareholders to vote against the Ascendent deal to secure the possibility of closing at a price of $29.50 per share.

Leading proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis recommended shareholders vote against the Ascendent deal, citing concerns about the sale process and the actions of the special committee. The consortium emphasizes that rejecting the Ascendent deal will not result in termination fees to Hollysys and argues that voting against it is in the best interests of shareholders.

The consortium also emphasized the importance of not voting on the Ascendent transaction to preserve dissent and assessment rights under section 179 of the British Virgin Islands Business Companies Act. This notice comes in light of the lack of information about these rights in Hollysys’ proxy statement.

This news is based on a press release from Dazheng Group Acquisition Limited.

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