Shareholders ask China's Hollysys to set special meeting amid takeover frustration

Korea Investment Holdings Co

30/08/2023 15:59

By Svea Herbst-Bayliss
       NEW YORK, Aug 30(Reuters) - Shareholders in China's
Hollysys Automation Technologies  HOLI.O  owning a total 32.2%
of the automation control system maker's shares asked the board
of directors to set a special shareholder meeting, according to
a letter seen by Reuters.
    Asking for a special meeting is a highly unusual step and
signals shareholders' mounting frustration with management of
the U.S.-listed company, which has received takeover bids but
which has not started a sales process, people familiar with the
matter said.
    The letter was sent to the company on behalf of 33
investors, including hedge funds Oasis Management and Maso
Capital, by law firm Conyers Dill & Pearman on Aug. 23.
    "We trust that the board of directors of the Company are
taking the appropriate steps to duly convene a meeting of the
shareholders of the Company to consider the matters set out in
the member's business notice without delay," the letter said.
    A representative for the law firm said Hollysys has not
responded to the letter. Hollysys also did not respond to
requests for comment for this story.
    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.
    Last week Recco Control Technology Pte. Ltd. and Dazheng
Group Investment Holdings Company Limited made an all-cash offer
of $25 per share, or $1.55 billion, to buy the company. The bid
sent the share price up more than 10% and it traded at $18.63
early on Wednesday.
    The 30-year old company, valued at $1.2 billion, operates in
four sectors: industrial automation, transportation automation,
medical and health care, and energy and environmental
protection, and its stock has climbed 10.8 percent since
January. The company is listed in the United States,
incorporated in the Cayman Islands and headquartered in China.
    Registered shareholders have a statutory right under section
82 of the BVI Business Companies Act (British Virgin Islands) to
require the Hollysys board to convene a shareholder meeting.
    Any shareholder also has a statutory right to apply to the
court for an order requiring a shareholder meeting to be held on
the basis that it is in the interest of the shareholders that
such a meeting be held.

     
    
    

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