Buyer consortium urges Hollysys directors to convene Special Meeting

A buyer consortium led by Recco Control Technology and Dazheng Group Investment Holdings Company expressed its strong desire for the Special Committee of the board of directors of Hollysys Automation Technologies to allow the sale process of the Company to move forward for all potential buyers. Members of the consortium also include TFI Asset Management Limited, and Great Wall Capital Co., Ltd. The consortium said, “The consortium urges the Special Committee to carefully evaluate the latest non-binding indicative all-cash offer of $26.50 per share from the consortium which is the highest among all of the offers submitted, effectively valuing the firm at approximately $1.64 billion, and to allow the consortium to conduct customary due diligence in order to move forward with its proposal. The sales process must be transparent and genuine for all potential bidders for it to be in the best interest of Hollysys shareholders and realize the true value of the Company. The consortium also calls on the directors of Hollysys to respect the rights of its shareholders and convene the legitimately requested special meeting immediately. As was recognized in Hollysys’ statement on October 30, 2023, the directors of Hollysys have received valid requests for a special meeting from shareholders holding more than 30% of the Company as of the demand record date previously set by the board. Ascendent Capital Partners, which holds 13.7% of the shares, has also publicly called on the directors of Hollysys to convene the special meeting. This brings the total shareholders requiring the directors to convene the special meeting to 46%. The right to meet is an unqualified and unfettered absolute right of the shareholders. The directors should convene the special meeting immediately to uphold their fiduciary duties. The fact that the special meeting has not been convened by the directors is causing the consortium to have serious concerns over Hollysys’ conduct of the sale process and the accountability of the directors to their shareholders. It is unprecedented for a board of directors to refuse to voluntarily and timely convene a meeting which nearly half of their shareholders legitimately want held.”