Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Hollysys Automation Technologies / Event-Driven

Hollysys Automation Technologies (HOLI US)

<ul>
<li>On the 26th January, proxy advisor Glass Lewis issued a report recommending <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys (HOLI US)</a> shareholders vote against Ascendent's merger. Two days later, ISS issued a similar opinion.  </li>
<li>Both reports targeted HOLI's efforts to maximize an Offer price. Elsewhere, some salient points were raised. But overall, there exists an air of naivety in their conclusions.</li>
<li>HOLI's EGM is scheduled for February 8th. The merger consideration of US$26.50/share is in line with, or above, the estimated values of Deutsche Bank's fairness opinion.</li>
</ul>


On the 26th January, proxy advisor Glass Lewis issued a report recommending Hollysys (HOLI US) shareholders vote against Ascendent's merger. Two days later, ISS issued a similar opinion.  
Both reports targeted HOLI's efforts to maximize an Offer price. Elsewhere, some salient points were raised. But overall, there exists an air of naivety in their conclusions.
HOLI's EGM is scheduled for February 8th. The merger consideration of US$26.50/share is in line with, or above, the estimated values of Deutsche Bank's fairness opinion.


Hollysys (HOLI US): Critiquing ISS & Glass Lewis' Critiques

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a> has <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=317971425&amp;type=PDF&amp;symbol=HOLI&amp;cdn=0e2d131620eff2ab7ed1d90ed671859e&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=6-K&amp;dateFiled=2024-01-05" target="_blank" rel="noopener">announced</a> that an EGM is scheduled for February 8th to vote on the merger agreement with Ascendent Capital Partners. </li>
<li>The Offer price remains at US$26.50/ADS. The shareholder approval required is simple majority. Regulatory approvals include NDRC, MoC and SAFE. Maybe a national security review.</li>
<li>And the Dazheng consortium? Apparently insufficient information as to its financing sources and consortium structure ruled it out. Separately, the SGM to spill the board has now been called off. </li>
</ul>



Hollysys Automation Technologies (HOLI US) has announced that an EGM is scheduled for February 8th to vote on the merger agreement with Ascendent Capital Partners. 
The Offer price remains at US$26.50/ADS. The shareholder approval required is simple majority. Regulatory approvals include NDRC, MoC and SAFE. Maybe a national security review.
And the Dazheng consortium? Apparently insufficient information as to its financing sources and consortium structure ruled it out. Separately, the SGM to spill the board has now been called off. 


Hollysys (HOLI US): 8th Feb Shareholder Vote. Dazheng Fails The Sniff Test

<ul>
<li>On the 13 December, Bloomberg reported that the Recco-led group consortium was weighing a revised Offer to be “significantly higher than the $26.50-a-share cash offer from Ascendent Capital”</li>
<li>On the 24 December, a buyer consortium led by Dazheng Group announced an all-cash proposal of US$29.00/share, a 9.4% premium to Ascendent's Offer. "Credible" financing is in place.</li>
<li>"The Consortium stands ready to engage with the Board".  The Board should engage. The one curious aspect of this latest Offer is the apparent absence of Recco's involvement. </li>
</ul>


On the 13 December, Bloomberg reported that the Recco-led group consortium was weighing a revised Offer to be “significantly higher than the $26.50-a-share cash offer from Ascendent Capital”
On the 24 December, a buyer consortium led by Dazheng Group announced an all-cash proposal of US$29.00/share, a 9.4% premium to Ascendent's Offer. "Credible" financing is in place.
"The Consortium stands ready to engage with the Board".  The Board should engage. The one curious aspect of this latest Offer is the apparent absence of Recco's involvement. 


Hollysys (HOLI US): Dazheng Consortium "Trumps" Ascendent's Bid

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>'s board persistent stonewalling was effectively terminated after the its court injunction was dismissed last month. An SGM will now take place sometime next month.  </li>
<li>A firm merger agreement was expected this month, and Hollysys <a href="https://hollysys.investorroom.com/2023-12-11-Hollysys-to-be-Acquired-by-Ascendent-Capital-Partners-for-US-26-50-in-Cash-Per-Share" target="_blank" rel="noopener">announced</a> yesterday Ascendent Capital has emerged as the preferred suitor with a (revised) US$26.50/share Offer. </li>
<li>This looks to be (finally) all stitched up. Trading wide-ish to terms. Get involved. </li>
</ul>



Hollysys Automation Technologies (HOLI US)'s board persistent stonewalling was effectively terminated after the its court injunction was dismissed last month. An SGM will now take place sometime next month.  
A firm merger agreement was expected this month, and Hollysys announced yesterday Ascendent Capital has emerged as the preferred suitor with a (revised) US$26.50/share Offer. 
This looks to be (finally) all stitched up. Trading wide-ish to terms. Get involved. 


Hollysys Gives Ascendent Capital The Nod. "Agnostic" Shareholders Will Approve

<ul>
<li>A fortnight after co-COOs pitched a US$25/share indicative Offer for <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys (HOLI US)</a>, Ascendent Capital, holding 13.7%, tabled a US$26/share Offer. The Recco/Dazheng consortium offered US$26.50 a week later.</li>
<li>There is currently a dispute over the ownership and control of Ace Lead's shares in Hollysys, which was subject to an injunction hearing in the Hong Kong High Court.</li>
<li>That hearing took place today. So I went along to hear first-hand the key arguments from both sides. </li>
</ul>


A fortnight after co-COOs pitched a US$25/share indicative Offer for Hollysys (HOLI US), Ascendent Capital, holding 13.7%, tabled a US$26/share Offer. The Recco/Dazheng consortium offered US$26.50 a week later.
There is currently a dispute over the ownership and control of Ace Lead's shares in Hollysys, which was subject to an injunction hearing in the Hong Kong High Court.
That hearing took place today. So I went along to hear first-hand the key arguments from both sides. 


China

Zhejiang Longsheng Group Co., Ltd. manufactures a variety of dyes including high intensity and rapid-dying Lonsperse Dye. The Company sells its products domestically and exports worldwide.

Zhejiang Longsheng Group Co., (600352 CH)

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Zhejiang Longsheng Group Co., (600352 CH)

Hollysys (HOLI US): Critiquing ISS & Glass Lewis' Critiques

HOLI is cheap, not only at US$26.50, but also US$29/share. That's all known. I'd take a firm Offer at US$26.50. So would fatigued shareholders.

David Blennerhassett

Hollysys (HOLI US): 8th Feb Shareholder Vote. Dazheng Fails The Sniff Test

Some thoughts after Norges announced a 7.49% stake on the 12 Jan. Norges disclosed its position with a 13G filing, which typically means the...

David Blennerhassett

Hollysys (HOLI US): Dazheng Consortium "Trumps" Ascendent's Bid

Your current, possible upside to Dazheng's Offer is 7.9%; and your downside is just 1.3%. I'd still get involved here, and on any weakness.

David Blennerhassett

Hollysys Gives Ascendent Capital The Nod. "Agnostic" Shareholders Will Approve

Reportedly (Bloomberg), the Recco-led group (including Dazheng Group Investment Holdings), has financing lined up and is weighing a revised Offer...

David Blennerhassett

Hollysys (HOLI US): In Court Today ...

Game on! Hollysys has confirmed an SGM will be held the week commencing 22 January 2024. The record date to be eligible to vote is the 27 November....

David Blennerhassett

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