Dazheng Group reaffirms commitment to acquire Hollysys at $29.50 per share

Buyer Consortium led by Dazheng Group Acquisition Limited issued a statement reaffirming the merits of its offer to acquire Hollysys Automation Technologies. The statement partly reads, “The Buyer Consortium, led by Dazheng Group, remains extremely motivated to acquire Hollysys at US$29.50 per share. This offer represents a significantly greater value proposition for Hollysys shareholders, providing an 11.3% premium to the Ascendant Capital offer. The Consortium emphasizes to Hollysys shareholders its commitment to acquire Hollysys at US$29.50 per share will remain unchanged by fluctuations in the share price of Hollysys, market conditions, or if the proposed Ascendent transaction is rejected by shareholders at the upcoming Extraordinary General Meeting on February 8, 2024… The commitment from Dazheng Group Acquisition Limited is robustly supported by back-to-back equity commitment letters, which have been formally executed by three sponsors as of January 25, 2024. Each sponsor has demonstrated their ability to fulfill their financial commitments by supplying robust proof of funding. This includes bank statements detailing offshore fund balances and/or documentation confirming available funds, all of which have been either officially stamped by the bank or signed by an authorized bank representative. The Consortium has adhered to all reasonable demands of the Special Committee throughout the entirety of this negotiation process, resulting in financing commitments beyond industry standards and, to the Consortium’s knowledge, beyond those of Ascendent Capital. Notably, Hollysys has not detailed in its proxy statement the basis on which the Special Committee validated Ascendent Capital’s financial capacity, aside from the filing of signed commitment letters… The Consortium wishes to highlight to the shareholders that, despite facing challenges in our dealings with the Special Committee, the Special Committee acknowledged in the proxy statement supplement dated January 31, 2024, that negotiations on transaction documents between Hollysys and the Consortium began on January 28, 2024. This acknowledgment implies the Special Committee’s recognition of our proposal as superior or reasonably likely to be superior, because otherwise, the Special Committee is prohibited from negotiating documents with the Consortium under the signed merger agreement. Unfortunately, the Special Committee set a stringent deadline of January 29, 2024, for finalizing all aspects of the deal, without considering the possibility of recommending an adjournment of the EGM to shareholders. The Consortium maintains that in order to fully meet their fiduciary duties as dictated by BVI law, the Special Committee should have recommended to the shareholders the adjournment of the EGM. Without the presentation of this option to the shareholders, the shareholders’ sole recourse to secure the benefit from an exit at $29.50 per share is to vote AGAINST the Ascendent transaction. Furthermore, should there be any recommendation from the Board or Chairman of the EGM to adjourn the EGM, and such adjournment is approved, the Consortium urges shareholders to require the Board to convene a shareholders meeting to be held at the same time as the adjourned EGM and allow shareholders to consider the Consortium’s proposal… Hollysys shareholders have a better alternative than what the Board is currently presenting them. The Consortium urges shareholders to not leave an extra 11.3% on the table by voting AGAINST the proposed Ascendent transaction at the upcoming EGM on February 8, 2024.”