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.

Event-Driven

Hollysys Automation Technologies / Event-Driven

<ul>
<li>Six months after announcing a binding proposal, Ascendent has <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=318426662&amp;type=PDF&amp;symbol=HOLI&amp;cdn=3467fa76f096a159d60e77540b09d977&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=SC+13D%2FA&amp;dateFiled=2024-07-01" target="_blank" rel="noopener">obtained</a> all the Chinese regulatory approvals for its US$26.50 <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> offer. </li>
<li>The gross spread was wide due to the information vacuum, which has resulted in various conspiracy theories and rumours circulating.</li>
<li>The two remaining conditions required for close are the maximum dissenting cap (should be waived) and minimum net cash condition (satisfied). At the last close, the gross spread was 22.5%.</li>
</ul>


Six months after announcing a binding proposal, Ascendent has obtained all the Chinese regulatory approvals for its US$26.50 Hollysys Automation Technologies (HOLI US) offer. 
The gross spread was wide due to the information vacuum, which has resulted in various conspiracy theories and rumours circulating.
The two remaining conditions required for close are the maximum dissenting cap (should be waived) and minimum net cash condition (satisfied). At the last close, the gross spread was 22.5%.


Hollysys (HOLI US): Ascendent Finally Obtains Regulatory Approvals

<ul>
<li>I have received several questions from readers on Ascendent’s binding proposal for <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> in the context of the current gross spread of 12.1%. </li>
<li>The questions primarily concerned the Capital Forum article, NSR approvals, timelines, auditor resignation and deal break risks. </li>
<li>Most of the questions concerned regulatory approval risk. The delay in closing is mainly procedural (government red tape) rather than an indication that regulators will block the deal. </li>
</ul>


I have received several questions from readers on Ascendent’s binding proposal for Hollysys Automation Technologies (HOLI US) in the context of the current gross spread of 12.1%. 
The questions primarily concerned the Capital Forum article, NSR approvals, timelines, auditor resignation and deal break risks. 
Most of the questions concerned regulatory approval risk. The delay in closing is mainly procedural (government red tape) rather than an indication that regulators will block the deal. 


Hollysys (HOLI US): Further Thoughts on the Widening Spread

<ul>
<li>A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.</li>
<li>ECM developments: <a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> and <a href="https://www.smartkarma.com/entities/j-t-global-express-ltd" target="_blank" data-smartkarma-citation="entities:36819:1" rel="noopener">J&amp;T Global Express (1519 HK)</a> lock-ups. <a href="https://www.smartkarma.com/entities/hd-hyundai-marine-solution-co" target="_blank" data-smartkarma-citation="entities:41002:1" rel="noopener">HD Hyundai Marine Solution (443060 KS)</a>, <a href="https://www.smartkarma.com/entities/zeekr-intelligent-technology-holding" target="_blank" data-smartkarma-citation="entities:36785:1" rel="noopener">ZEEKR (ZK US)</a> and <a href="https://www.smartkarma.com/entities/sichuan-baicha-baidao-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:40029:1" rel="noopener">Sichuan Baicha Baidao Industrial (2555 HK)</a> IPOs.</li>
<li>Event-Driven developments: <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>, <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a>, <a href="https://www.smartkarma.com/entities/inageya-co-ltd" target="_blank" data-smartkarma-citation="entities:13994:1" rel="noopener">Inageya Co Ltd (8182 JP)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a>, <a href="https://www.smartkarma.com/entities/tietto-minerals-ltd" target="_blank" data-smartkarma-citation="entities:28006:1" rel="noopener">Tietto Minerals Ltd (TIE AU)</a>. </li>
</ul>


A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Kokusai Electric (6525 JP) and J&amp;T Global Express (1519 HK) lock-ups. HD Hyundai Marine Solution (443060 KS), ZEEKR (ZK US) and Sichuan Baicha Baidao Industrial (2555 HK) IPOs.
Event-Driven developments: Hollysys Automation Technologies (HOLI US), Shinko Electric Industries (6967 JP), Inageya Co Ltd (8182 JP), Hang Lung Properties (101 HK), Tietto Minerals Ltd (TIE AU). 


Weekly Deals Digest (21 Apr) - Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On the 8th February 2024, 85% of <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation (HOLI US</a><a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">)</a> shareholders present and via proxy, <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=318042742&amp;type=PDF&amp;symbol=HOLI&amp;cdn=6d522b9b90b026dc73ccdc7b55e77ef2&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=6-K&amp;dateFiled=2024-02-08" target="_blank" rel="noopener">voted</a> for Ascendent Capital's Offer. After three-plus years, the end was finally in sight.</li>
<li>Then crickets. The merger was to complete in the 1Q. On the 15th April, HOLI released an accountant resignation notice. No word on dissenters or regulatory approvals. Shares sold off. </li>
<li>
The accountant resignation is a nothing burger. HOLI should lift their game and provide more transparency on the outstanding merger conditions. Still, the spread is attractive. This is a buy. </li>
</ul>


On the 8th February 2024, 85% of Hollysys Automation (HOLI US) shareholders present and via proxy, voted for Ascendent Capital's Offer. After three-plus years, the end was finally in sight.
Then crickets. The merger was to complete in the 1Q. On the 15th April, HOLI released an accountant resignation notice. No word on dissenters or regulatory approvals. Shares sold off. 

The accountant resignation is a nothing burger. HOLI should lift their game and provide more transparency on the outstanding merger conditions. Still, the spread is attractive. This is a buy. 


<ul>
<li>On 15 April, <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> issued a <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=318235388&amp;type=PDF&amp;symbol=HOLI&amp;cdn=8f7c9a3e128d3526709fdad9f029dff5&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=6-K&amp;dateFiled=2024-04-15" target="_blank" rel="noopener">6-K filing</a> stating that Ascendent remains in the process of obtaining regulatory approvals. </li>
<li>The gross spread has widened to 8% as the closing date has slipped from the end of March guidance, and an updated timeline is lacking. </li>
<li>A delay in securing regulatory approvals is not uncommon. However, regulatory approvals should be forthcoming as the transaction involves Chinese entities (including a SASAC entity) acquiring a Chinese-focused company. </li>
</ul>


On 15 April, Hollysys Automation Technologies (HOLI US) issued a 6-K filing stating that Ascendent remains in the process of obtaining regulatory approvals. 
The gross spread has widened to 8% as the closing date has slipped from the end of March guidance, and an updated timeline is lacking. 
A delay in securing regulatory approvals is not uncommon. However, regulatory approvals should be forthcoming as the transaction involves Chinese entities (including a SASAC entity) acquiring a Chinese-focused company. 


Hollysys (HOLI US): Keep Calm as Closing Date Slips

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): Ascendent Finally Obtains Regulatory Approvals

The two remaining conditions required for close are the maximum dissenting cap (should be waived) and minimum net cash condition (satisfied). At...

Arun George

Hollysys (HOLI US): Further Thoughts on the Widening Spread

Readers have asked me several questions about the widening spread. This piece outlines my answers to these questions. It remains a case of when,...

Arun George

Weekly Deals Digest (21 Apr) - Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine

Last week, notable developments occurred in Event-Driven (Hollysys, CF Logistics, Shinko, Inageya, Hang Lung Properties, Tietto ) and ECM (Kokusai,...

Arun George

Hollysys (HOLI US): This Is A Buy

Trading wide at a gross spread of 7.4% to the US$26.50 Offer terms. Take advantage of investor fatigue, and buy HOLI here.

David Blennerhassett

Hollysys (HOLI US): Keep Calm as Closing Date Slips

The spread has widened to 8% due to regulatory approval concerns. Regulatory approval should be forthcoming as the transaction involves Chinese...

Arun George

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