- Special Committee concluded Dazheng proposal
was not superior after rigorous negotiations
- Dazheng was unable to provide sufficient
assurances around equity financing and last-minute introduction of
yet another new member after multiple changes in its consortium
composition raised further questions that could not be
resolved
- Special Committee strongly disagrees
with flawed ISS and Glass Lewis recommendations: a transparent and
well-run process has brought the right outcome for shareholders:
the Ascendent deal
- Updated proxy materials detailing engagement
with Dazheng in recent weeks will be released shortly
BEIJING, Jan. 29,
2024 /PRNewswire/ -- The Special Committee
of Hollysys Automation Technologies Ltd. (NASDAQ: HOLI)
("Hollysys" or the "Company") today
reiterated its unanimous recommendation that shareholders vote FOR
the acquisition of the Company by a buyer controlled by Ascendent
Capital Partners ("Ascendent"), an international and experienced
private investment firm headquartered in Hong Kong.
Contrary to claims made by Dazheng Group Acquisition Limited
("Dazheng") the Special Committee has continued to consider
approaches and proposals over the last few weeks, in a meticulous,
good faith effort and remained open to considering a superior
proposal to the deal signed with Ascendent, in line with its
prerogatives in the merger agreement and its fiduciary duty to
shareholders. The most recent discussions concluded with the
determination by the Special Committee that the Dazheng proposal is
not superior to the Ascendent acquisition. The Special Committee
does not have confidence in the certainty of Dazheng's equity
financing nor its ability to successfully close a transaction,
given its constantly changing equity consortium structure,
including the last-minute introduction of a new member that is
purportedly now its primary source of equity funding but with no
proper financial arrangement to provide certainty of funds.
Moreover, Dazheng proposed an escrow structure entirely onshore and
denominated in RMB.
The Special Committee believes that it is imperative to work
toward closing the acquisition by Ascendent and recommends that
shareholders vote FOR the Ascendent acquisition at the February 8, 2024 extraordinary general
meeting.
In a statement, the Special Committee said: "The prospect of a
deal not taking place risks too much downside to shareholder value
given macro conditions and the geopolitical context in which we
operate. We selected Ascendent after running a comprehensive and
rigorous process, where the Dazheng Consortium declined initially
to even sign an NDA. When they came late to the table, we made good
faith efforts to work with Dazheng during the go-shop period and
beyond, but the fact remains that Ascendent is the only bidder that
has emerged with an offer of compelling value that is fully
financed and with a viable pathway to closing. We continue to focus
solely on our fiduciary duty to shareholders. We cannot disregard
the significant risks associated with Dazheng's proposal, evidenced
by their inability to provide proof of committed financing and the
ever-changing makeup of its consortium. We reaffirm our position
that the Ascendent acquisition is in the best interests of our
shareholders, and we recommend that shareholders vote FOR the
Ascendent acquisition on February 8th
for near-term cash with high certainty of closing."
A proxy statement supplement detailing the Special Committee's
recent engagement with Dazheng will be furnished with the U.S.
Securities and Exchange Commission in due course.
Response to ISS and Glass Lewis
The Special Committee strongly disagrees with the
recommendations of ISS and Glass Lewis regarding the transaction
with Ascendent. Neither ISS nor Glass Lewis provided any judgement
on the value of the Ascendent offer. The Special Committee ran a
transparent, competitive and rigorous sale process. Further, in its
report, ISS itself acknowledges that Ascendent's proposal is at a
sizeable premium and if there is no transaction the Company's share
price is likely to fall.
Commenting on the reports, the Special Committee stated: "We are
extremely concerned that these proxy firms, which are hired by
shareholders to provide expert analysis, are advising shareholders
to reject a transaction that provides compelling value with no
viable alternative in hand. They leave shareholders exposed to
significant risk of a potentially meaningful drop in the value of
their shares."
About Hollysys Automation Technologies Ltd.
Hollysys is a leading automation control system solutions
provider in China, with overseas
operations in eight other countries and regions throughout
Asia. Leveraging its proprietary
technology and deep industry know-how, Hollysys empowers its
customers with enhanced operational safety, reliability,
efficiency, and intelligence which are critical to their
businesses. Hollysys derives its revenues mainly from providing
integrated solutions for industrial automation and rail
transportation. In industrial automation, Hollysys delivers the
full spectrum of automation hardware, software, and services
spanning field devices, control systems, enterprise manufacturing
management and cloud-based applications. In rail transportation,
Hollysys provides advanced signaling control and SCADA (Supervisory
Control and Data Acquisition) systems for high-speed rail and urban
rail (including subways). Founded in 1993, with technical expertise
and innovation, Hollysys has grown from a research team
specializing in automation control in the power industry into a
group providing integrated automation control system solutions for
customers in diverse industry verticals. As of June 30, 2023, Hollysys had cumulatively carried
out more than 45,000 projects for approximately 23,000 customers in
various sectors including power, petrochemical, high-speed rail,
and urban rail, in which Hollysys has established leading market
positions.
Safe Harbor Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical fact included
herein are "forward-looking statements," including statements
regarding the ability of the Company to achieve its commercial
objectives; the business strategy, plans and objectives of the
Company; growth in financial and operational performance of the
Company; and any other statements of non-historical information.
These forward-looking statements are often identified by the use of
forward-looking terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates," "target," "confident," or similar expressions involve
known and unknown risks and uncertainties. Such forward-looking
statements, based upon the current beliefs and expectations of
Hollysys' management, are subject to risks and uncertainties, which
could cause actual results to differ from the forward-looking
statements. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. Investors should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The Company's actual
results could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in the Company's reports that are filed
with the Securities and Exchange Commission and available on its
website (http://www.sec.gov). All forward-looking statements
attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these factors. Other than
as required under the securities laws, the Company does not assume
a duty to update these forward-looking statements.
Contact Information
Company Contact:
Hollysys Automation Technologies Ltd.
www.hollysys.com
+8610-5898-1386
investors@hollysys.com
Media Contacts (Hong Kong and
New York):
Brunswick Group
hollysys@brunswickgroup.com
Daniel Del Re (Hong Kong)
ddelre@brunswickgroup.com
+852 9255 5136
Libby Lloyd (New York)
llloyd@brunswickgroup.com
+1 347 283 3871
View original
content:https://www.prnewswire.com/news-releases/hollysys-reiterates-strong-support-for-ascendent-deal-provides-update-on-engagement-with-dazheng-302047294.html
SOURCE Hollysys Automation Technologies Ltd