Under the terms of the revised offer, the consortium will pay $26.5 per share in cash for the shareholders of the Nasdaq-listed Hollysys Automation Technologies, which operates in the transportation automation, industrial automation, medical and health care, and energy and environmental protection sectors
A consortium led by Recco and Dazheng has sweetened its bid for Hollysys Automation Technologies to $1.64bn. (Credit: aymane jdidi from Pixabay)
A consortium led by Recco Control Technology and Dazheng Group (Hong Kong) Investment-led has increased its buyout offer to acquire Hollysys Automation Technologies, a China-based automation and IT solutions provider, to $1.64bn.
Other members of the consortium include TFI Asset Management and Great Wall Capital.
Both parties have signed a memorandum of strategic cooperation with Recco Control Technology and Dazheng Group regarding the proposed acquisition of the Chinese firm.
Under the terms of the revised offer, the consortium will pay $26.5 per share in cash for Hollysys Automation Technologies’ shareholders.
An initial bid of $25 per share in cash was submitted by the consortium to the publicly-listed automation and IT solutions provider in August 2023. Currently, it is listed on Nasdaq.
According to the consortium, the sweetened proposal represents a premium of 42% to Hollysys Automation Technologies’ closing share price of $18.66 on 23 August 2023 and a 6% increase from the previous offer.
It is also more than Ascendent Capital Partners’ offer of $26 per share in cash which was made earlier this week to Hollysys Automation Technologies.
The Recco Control Technology and Dazheng-led consortium said that it is in the final stage to secure a binding and definitive commitment to support the buyout proposal.
Following the completion of the proposed deal, Hollysys Automation Technologies will become a private company.
Recco Control Technology director Ke Lei said: “The consortium’s decision to increase our offer to US$26.50 per share is underpinned by our steadfast pursuit of acquiring Hollysys and our motivation to be competitive in a transparent and genuine sale process.
“We believe that this offer, which is at a compelling premium and is backed by our unquestionable confidence in securing financing, represents an unparalleled opportunity for Hollysys’ shareholders to maximise the value of their shares swiftly and with certainty.”
UBS’ Hong Kong branch is acting as the financial advisor to Recco Control Technology and Dazheng Group. Sullivan & Cromwell and DLA Piper are US counsels to the consortium.
The consortium is being advised by Conyers Dill & Pearman on BVI law.
Founded in 1993, Hollysys Automation Technologies operates in four sectors, which include transportation automation, industrial automation, medical and health care, and energy and environmental protection.