Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Hollysys (HOLI US): The Subtle Third Offer

Hollysys (HOLI US) Suspends Proposal Evaluations As Fourth Bid Emerges

Hollysys (HOLI US): Potential Suitors Didn't Get The Memo

Hollysys (HOLI US): CPE's Broadsides Continue

Hollysys (HOLI US): CPE Heightens Its Case Amid Shareholding Dispute

Quiddity Advisors

Event-Driven

Hollysys Automation Technologies / Event-Driven

Hollysys Automation Technologies (HOLI US)

<div>
<p><a href="https://www.smartkarma.com/entities/hollysys-automation-technolo" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener"></a>Before launching into the latest news for <a href="https://www.smartkarma.com/entities/hollysys-automation-technolo" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technology (HOLI US)</a>, one of the leading automation control system solutions provider in China, below is a summary of recent key "events":</p>
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<h3>Date</h3>
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<h3>Data in the Date</h3>
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<td style="width: 164.564px;">7-Dec-20</td>
<td style="width: 581.448px;">A consortium including co-founder and former Hollysys CEO Baiqing Shao, Ace Funds, and Chinese PE outfit CPE Funds Management <a href="http://hollysys.investorroom.com/2020-12-10-Hollysys-Announces-Receipt-of-a-Non-Binding-Going-Private-Proposal" target="_blank" rel="noopener">pitched</a> an unsolicited US$15.47/share cash Offer. The Offer was rejected</td>
</tr>
<tr>
<td style="width: 164.564px;">8-Jan-21</td>
<td style="width: 581.448px;">The Offer was summarily <a href="http://hollysys.investorroom.com/2021-01-08-Hollysys-Board-of-Directors-Rejects-Unsolicited-Offer" target="_blank" rel="noopener">rejected</a>
</td>
</tr>
<tr>
<td style="width: 164.564px;">1-Feb-21</td>
<td style="width: 581.448px;">The consortium bumped its Offer to acquire the company to US$17.10/share on the <a href="http://hollysys.investorroom.com/2021-02-01-Hollysys-Board-of-Directors-to-Review-Revised-Unsolicited-Proposal" target="_blank" rel="noopener">1 February</a>.</td>
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<td style="width: 164.564px;">9-Mar-21</td>
<td style="width: 581.448px;">Hollysys <a href="http://hollysys.investorroom.com/2021-03-15-Hollysys-Board-of-Directors-Received-a-Notice-From-Hollysys-Committee-on-Trust-Interests" target="_blank" rel="noopener">announced</a> a legal action had commenced in the Hong Kong High Court against Shao and Ace Lead, concerning the legal dispute over the beneficial ownership of the Hollysys' shares held by Ace Lead and the beneficial ownership of the shares of Ace Lead held by Shao.</td>
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<td style="width: 164.564px;">14-Mar-21</td>
<td style="width: 581.448px;">In a <a href="https://www.businesswire.com/news/hk-zh/20210314005017/en/Shao-Baiqing-and-Ace-Lead-Profits-Limited-Won-Preliminary-Victory-Against-Hollysys-Automation-Technologies-in-the-BVI" target="_blank" rel="noopener">press release</a>, Shao Baiqing and Ace Lead Profits allege they had won a preliminary victory against Hollysys.</td>
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<tr>
<td style="width: 164.564px;">16-Mar-21</td>
<td style="width: 581.448px;">Hollysys countered <a href="http://hollysys.investorroom.com/2021-03-16-Hollysys-Response-to-Ace-Lead-Profits-Limited-Misleading-Press-Release" target="_blank" rel="noopener">these</a> statements re: a preliminary victory were highly misleading.</td>
</tr>
<tr>
<td style="width: 164.564px;">13-Apr-21</td>
<td style="width: 581.448px;">
<div>
<p>CPE has <a href="https://www.businesswire.com/news/home/20210413006213/en/Buyer-Consortium-Comments-on-Recent-Financial-and-Operational-Information-Released-by-Hollysys-Automation-Technologies" target="_blank" rel="noopener">critiqued</a> Hollysys' 1H21 results (to 31 December 2020), and concluded that: "It is clear that existing management and the board of directors of the Company do not know how to run the business successfully"</p>
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</td>
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<td style="width: 164.564px;">29-Jun-21</td>
<td style="width: 581.448px;">Baiqing Shao, Ace Funds, and Chinese PE outfit CPE <a href="https://www.businesswire.com/news/home/20210628005886/en/Buyer-Consortium-Commences-a-Solicitation-of-Consents-from-Shareholders-of-Hollysys-Automation-Technologies-to-Seek-Support-on-Shareholder-Resolutions-Regarding-its-17.10-Per-Share-in-Cash-Acquisition-Proposal" target="_blank" rel="noopener">commenced</a> a solicitation of consents from shareholders of Hollysys to seek support on its $17.10/share in cash proposal.</td>
</tr>
<tr>
<td style="width: 164.564px;">1-Jul-21</td>
<td style="width: 581.448px;">
<p>Hollysys urges shareholders to take <a href="http://hollysys.investorroom.com/2021-07-01-Hollysys-Urges-Shareholders-to-Take-No-Action-on-Consortiums-Consent-Solicitation" target="_blank" rel="noopener">no action</a> on the consortium's consent solicitation</p>
</td>
</tr>
<tr>
<td style="width: 164.564px;">8-Jul-21</td>
<td style="width: 581.448px;">The consortium reminds Hollysys shareholders to sign the consents by the <a href="https://www.businesswire.com/news/home/20210707005961/en/Buyer-Consortium-Warns-Hollysys-Shareholders-Not-to-Be-Misled-by-Company%E2%80%99s-Continuing-Incomplete-Disclosure-and-Delaying-Tactics" target="_blank" rel="noopener">22 July</a>. </td>
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<tr>
<td style="width: 164.564px;">16-Jul-21</td>
<td style="width: 581.448px;">Hollysys sets <a href="https://en.prnasia.com/releases/global/hollysys-sets-record-straight-on-consortium-s-consent-solicitation-325965.shtml" target="_blank" rel="noopener">record straight</a> on consortium's consent solicitation</td>
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<td style="width: 164.564px;">22-Jul-21</td>
<td style="width: 581.448px;">The buyer consortium <a href="https://www.businesswire.com/news/home/20210721006041/en/Buyer-Consortium-Extends-Deadline-for-HollySys-Shareholders-to-Submit-Consents-to-August-20-2021" target="_blank" rel="noopener">extends</a> the deadline for Hollysys' shareholders to submit consents to August 20, 2021.</td>
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<td colspan="2" style="width: 164.564px;"><em>Source: mainly Hollysys's press releases and SEC filings</em></td>
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</tbody>
</table>
<div>
<p>Quite the saga - talk about bad blood between the current board and the former chairman/CEO.</p>
<h3>The New News!</h3>
</div>
<div>
<p>Hollysys has now <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=116032020&amp;type=PDF&amp;symbol=HOLI&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=6-K&amp;dateFiled=2021-08-02&amp;CK=1357450" target="_blank" rel="noopener">announced</a> it is in the process of evaluating a non-binding offer from Superior Emerald, a company controlled by Ascendent Capital Partners, and Changli Wang, the founder of Hollysys (who retired in 2013 "with honor") to acquire all of the outstanding ordinary shares of Hollysys for US$23.00/share in cash.</p>
<p>That's a 34.5% premium to the CPE/Shao consortium proposal, and a ~84% premium to the undisturbed price.</p>
<p>More below the fold.</p>
</div>
</div>


Before launching into the latest news for Hollysys Automation Technology (HOLI US), one of the leading automation control system solutions provider in China, below is a summary of recent key "events":




Date


Data in the Date



7-Dec-20
A consortium including co-founder and former Hollysys CEO Baiqing Shao, Ace Funds, and Chinese PE outfit CPE Funds Management pitched an unsolicited US$15.47/share cash Offer. The Offer was rejected


8-Jan-21
The Offer was summarily rejected



1-Feb-21
The consortium bumped its Offer to acquire the company to US$17.10/share on the 1 February.


9-Mar-21
Hollysys announced a legal action had commenced in the Hong Kong High Court against Shao and Ace Lead, concerning the legal dispute over the beneficial ownership of the Hollysys' shares held by Ace Lead and the beneficial ownership of the shares of Ace Lead held by Shao.


14-Mar-21
In a press release, Shao Baiqing and Ace Lead Profits allege they had won a preliminary victory against Hollysys.


16-Mar-21
Hollysys countered these statements re: a preliminary victory were highly misleading.


13-Apr-21


CPE has critiqued Hollysys' 1H21 results (to 31 December 2020), and concluded that: "It is clear that existing management and the board of directors of the Company do not know how to run the business successfully"




29-Jun-21
Baiqing Shao, Ace Funds, and Chinese PE outfit CPE commenced a solicitation of consents from shareholders of Hollysys to seek support on its $17.10/share in cash proposal.


1-Jul-21

Hollysys urges shareholders to take no action on the consortium's consent solicitation



8-Jul-21
The consortium reminds Hollysys shareholders to sign the consents by the 22 July. 


16-Jul-21
Hollysys sets record straight on consortium's consent solicitation


22-Jul-21
The buyer consortium extends the deadline for Hollysys' shareholders to submit consents to August 20, 2021.


Source: mainly Hollysys's press releases and SEC filings




Quite the saga - talk about bad blood between the current board and the former chairman/CEO.
The New News!


Hollysys has now announced it is in the process of evaluating a non-binding offer from Superior Emerald, a company controlled by Ascendent Capital Partners, and Changli Wang, the founder of Hollysys (who retired in 2013 "with honor") to acquire all of the outstanding ordinary shares of Hollysys for US$23.00/share in cash.
That's a 34.5% premium to the CPE/Shao consortium proposal, and a ~84% premium to the undisturbed price.
More below the fold.



Hollysys (HOLI US): Competing Proposal From Founder