Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Hollysys Automation Technologies / Event-Driven

<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

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>Bloomberg <a href="https://au.finance.yahoo.com/news/glass-lewis-tells-hollysys-shareholders-092020273.html" target="_blank" rel="noopener">reports</a> that Glass Lewis has recommended <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> shareholders vote against Ascendent Capital’s US$26.50 offer on 8 February.</li>
<li>Glass Lewis notes that Hollysys could fetch “potentially materially greater value” from other bidders. Glass Lewis seems to ignore that Dazheng failed to demonstrate that it could complete its offer.</li>
<li>Despite Glass Lewis’s recommendation, the vote will likely get up. At the last close, the gross/annualised spread for an end-March close is 4.5%/28.0%.</li>
</ul>


Bloomberg reports that Glass Lewis has recommended Hollysys Automation Technologies (HOLI US) shareholders vote against Ascendent Capital’s US$26.50 offer on 8 February.
Glass Lewis notes that Hollysys could fetch “potentially materially greater value” from other bidders. Glass Lewis seems to ignore that Dazheng failed to demonstrate that it could complete its offer.
Despite Glass Lewis’s recommendation, the vote will likely get up. At the last close, the gross/annualised spread for an end-March close is 4.5%/28.0%.


Hollysys (HOLI US): Glass Lewis Says to Vote NO. Should You Listen?

<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>
<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> shareholders vote on Ascendent’s US$26.50 offer on 8 February. The special meeting will not be held as the 30% shareholding threshold is no longer satisfied.</li>
<li>The proxy statement shows that despite Dazheng Consoritum’s competing public campaign, it has withdrawn its court injunction and has struggled to provide proof of financing.</li>
<li>The proxy statement suggests that the special committee ran a fair process. While shareholders should approve Ascendent's offer, the 0.2% gross spread indicates an unfavourable risk/reward profile.</li>
</ul>



Hollysys Automation Technologies (HOLI US) shareholders vote on Ascendent’s US$26.50 offer on 8 February. The special meeting will not be held as the 30% shareholding threshold is no longer satisfied.
The proxy statement shows that despite Dazheng Consoritum’s competing public campaign, it has withdrawn its court injunction and has struggled to provide proof of financing.
The proxy statement suggests that the special committee ran a fair process. While shareholders should approve Ascendent's offer, the 0.2% gross spread indicates an unfavourable risk/reward profile.


Hollysys (HOLI US): Vote on 8 February as Hopes of a Rival Offer Fade

<ul>
<li>I tally 50 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>Two new deals discussed this week: <a href="https://www.smartkarma.com/entities/seedheiwa-co-ltd" target="_blank" data-smartkarma-citation="entities:5246:1" rel="noopener">Seedheiwa (1739 JP)</a>'s (now Meldia DC) Tender Offer; and <a href="https://www.smartkarma.com/entities/boart-longyear-ltd" target="_blank" data-smartkarma-citation="entities:4075:1" rel="noopener">Boart Longyear (BLY AU)</a>'s ignominious exit. </li>
<li>Key updates took place on: <a href="https://www.smartkarma.com/entities/orecorp-ltd" target="_blank" data-smartkarma-citation="entities:8120:1" rel="noopener">Orecorp (ORR AU)</a>, <a href="https://www.smartkarma.com/entities/symbio-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20292:1" rel="noopener">Symbio Holdings (SYM AU)</a>, <a href="https://www.smartkarma.com/entities/ijtt-co-ltd" target="_blank" data-smartkarma-citation="entities:19461:1" rel="noopener">IJTT (7315 JP)</a>, <a href="https://www.smartkarma.com/entities/shidax-corp" target="_blank" data-smartkarma-citation="entities:7754:1" rel="noopener">Shidax Corp (4837 JP)</a>, <a href="https://www.smartkarma.com/entities/ohizumi-mfg-co-ltd" target="_blank" data-smartkarma-citation="entities:3391:1" rel="noopener">Ohizumi Mfg (6618 JP)</a>, and <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>.</li>
</ul>


I tally 50 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals discussed this week: Seedheiwa (1739 JP)'s (now Meldia DC) Tender Offer; and Boart Longyear (BLY AU)'s ignominious exit. 
Key updates took place on: Orecorp (ORR AU), Symbio Holdings (SYM AU), IJTT (7315 JP), Shidax Corp (4837 JP), Ohizumi Mfg (6618 JP), and Hollysys Automation Technologies (HOLI US).


(Mostly) Asia-Pac Weekly Risk Arb Wrap: Meldia DC, Boart Longyear, Orecorp, Symbio, Shidax, Hollysys

United States

Hollysys Automation Technologies Ltd. manufactures automation and control systems.  The Company produces process, industrial, rail and subway, and nuclear power plant automation equipment.

Hollysys Automation Technologies (HOLI US)

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Hollysys Automation Technologies (HOLI US)

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.

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Hollysys (HOLI US): Glass Lewis Says to Vote NO. Should You Listen?

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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...

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Hollysys (HOLI US): Vote on 8 February as Hopes of a Rival Offer Fade

The vote should get up due to shareholder fatigue, Dazheng’s foot-dragging, a withdrawn injunction and no special meeting. With shares trading...

Arun George

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Meldia DC, Boart Longyear, Orecorp, Symbio, Shidax, Hollysys

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

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