Recco Control offers $1.64 bln to take Hollysys private, tops Ascendent bid

Hollysys Automation Technologies

08/11/2023 13:00

By Svea Herbst-Bayliss
       NEW YORK, Nov 8 (Reuters) - Recco Control Technology
Pte. Ltd. and Dazheng Group Investment Holdings Company Limited
offered to pay $1.64 billion to acquire Hollysys Automation
Technologies  HOLI.F , increasing its bid by 6% from what if
offered to pay in August, the group told Reuters.
    The group has proposed an all-cash offer of $26.50 a share
for the automation control system maker, compared with the $25 a
share offer it made in August. 
    The current bid represents a 42% premium to the company's
closing price before the group submitted its first bid.
    The new offer is more than the $1.6 billion takeover bid
Hollysys received on Monday from China-focused private equity
firm Ascendant Capital Partners which offered to pay $26 per
share in cash for the company.
    The Recco group's decision to raise its offer is
"underpinned by our steadfast pursuit of acquiring Hollysys and
our motivation to be competitive in a transparent and genuine
sale process," Recco director Ke Lei told Reuters.
    "We believe that this offer, which is at a compelling
premium, represents an unparalleled opportunity for Hollysys'
shareholders to maximize the value of their shares swiftly and
with certainty," he said.
    Hollysys' management team proposed a consideration of $25
per share last month and told Reuters on Tuesday the company "is
open to serious and compelling offers from all parties."
    It started a formal sales process last month and is being
advised by Deutsche Bank  DBKGn.DE .
    A year ago Hollysys management was ready to take the company
private at a $1.8 billion valuation, Reuters reported, but
nothing has happened since then.
    The 30-year old company, valued at $1.35 billion, operates
in four sectors: industrial automation, transportation
automation, medical and health care, and energy and
environmental protection. Its stock has climbed 30% since
January. The company is listed in the United States,
incorporated in the British Virgin Islands and headquartered in
China.

 (Reporting by Svea Herbst-Bayliss
Editing by Chris Reese)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))