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): CPE's Broadsides Continue

Hollysys (HOLI US): Competing Proposal From Founder

Hollysys (HOLI US): The Subtle Third Offer

Hollysys Auto Tech Placement - Has Ample Cash, Reasons for the Raising Remain Unclear

Quiddity Advisors

Event-Driven

Hollysys Automation Technologies / Event-Driven

Hollysys Automation Technologies (HOLI US)

On the 7 December, 2020, a consortium including co-founder and former <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> 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 for Hollysys, a leading automation control system solutions provider in China, which was summarily <a href="http://hollysys.investorroom.com/2021-01-08-Hollysys-Board-of-Directors-Rejects-Unsolicited-Offer" target="_blank" rel="noopener">rejected</a> on the 8 January as the Offer "substantially undervalues the Company and is not in the best interest of the Company’s shareholders .... (and that it) would deprive our shareholders of the value inherent in Hollysys for inadequate consideration."
Undeterred, 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>. Hollysys has yet to make public its opinion on the revised Offer, other than there is no need for shareholders to “take any action at this time”.
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, 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 on March 9, 2021.
In a press release on the <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">14 March</a>, Shao Baiqing and Ace Lead Profits allege they had won a preliminary victory against Hollysys.
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 were highly misleading.  The fact is that the Court has yet to adjudicate on the validity of the claim brought by Shao and Ace Lead and the legality of certain amendments to the Memorandum and Articles of Association. 
<h3>The New News</h3>
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:
<blockquote>
It is clear that existing management and the board of directors of the Company do not know how to run the business successfully.
</blockquote>
Quite the soap opera. Currently trading at a 34% gross spread to terms.
As always, more below the fold.

On the 7 December, 2020, a consortium including co-founder and former Hollysys Automation Technology (HOLI US) CEO Baiqing Shao, Ace Funds, and Chinese PE outfit CPE Funds Management pitched an unsolicited US$15.47/share cash Offer for Hollysys, a leading automation control system solutions provider in China, which was summarily rejected on the 8 January as the Offer "substantially undervalues the Company and is not in the best interest of the Company’s shareholders .... (and that it) would deprive our shareholders of the value inherent in Hollysys for inadequate consideration."
Undeterred, the consortium bumped its Offer to acquire the company to US$17.10/share on the 1 February. Hollysys has yet to make public its opinion on the revised Offer, other than there is no need for shareholders to “take any action at this time”.
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, Hollysys announced a legal action had commenced in the Hong Kong High Court against Shao and Ace Lead on March 9, 2021.
In a press release on the 14 March, Shao Baiqing and Ace Lead Profits allege they had won a preliminary victory against Hollysys.
Hollysys countered these statements were highly misleading.  The fact is that the Court has yet to adjudicate on the validity of the claim brought by Shao and Ace Lead and the legality of certain amendments to the Memorandum and Articles of Association. 
The New News
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.

Quite the soap opera. Currently trading at a 34% gross spread to terms.
As always, more below the fold.

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