Dazheng-led consortium urges Hollysys holders to vote against Ascendant deal

Buyer Consortium led by Dazheng Group Acquisition Limited issued the following public letter to shareholders of Hollysys Automation Technologies after the latest “unwarranted” rejection from the Hollysys Special Committee. “We urge you to vote AGAINST the Ascendent Capital transaction and urge the Board of Directors (“Board”) of Hollysys to comply with its fiduciary duty and convene a shareholder meeting to allow shareholders to consider the offer from the Consortium which realizes greater value for Hollysys shareholders,” the letter reads. “The Special Committee of the Board (“Special Committee”) has engaged in a disingenuous sales process for Hollysys, which has resulted in the Board only allowing shareholders to consider the Ascendent transaction and the Board recommending shareholders accept Ascendent’s $26.50 proposal over the Consortium’s $29.50 proposal (11.3% higher). Ascendent’s financing is uncertain, and the Ascendent transaction is subject to regulatory approvals, including potential Chinese national security review and outbound investment approval. Despite the Special Committee’s assertions, the proposed transaction with Ascendent Capital has not been held to an adequate level of scrutiny, has significant closing uncertainty and leaves shareholders exposed to considerable risk. Institutional Shareholder Services (“ISS”)and Glass Lewis have both recommended shareholders vote against the Ascendent transaction and it is not surprising that multiple shareholders have voiced their disdain for the proposed Ascendent transaction.”