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.