The drama to take over U.S.-listed Chinese firm Hollysys Automation is nearing a climax. The industrial automation solutions company finally agreed on Monday to be acquired for $1.7 billion by China-focussed Ascendent Capital Partners, which already holds a 14% stake. This caps a three-year-long saga during which the Beijing-based target fended off multiple approaches and campaigns by activists. Hollysys’ board recommended the winning buyout firm’s $26.50 per-share-offer, which sent its stock up 9%.
While the bid matches a rival consortium’s proposal, Hollysys said it was encouraged by Ascendant’s ability to fund and complete the deal quickly. Still, there could be another twist if the group led by Singapore-incorporated investor Recco Control Technology and Hong Kong’s Dazheng Group Investment trumps the latest offer. It has not publicly commented on the deal. Hollysys also needs shareholders to approve the offer.
Investors have long remained sceptical of Hollysys’ sale process. They have urged it to hold a special meeting to appoint more independent directors and are probably suffering from deal fatigue. A worthwhile end, though, may at last be in sight. (By Anshuman Daga)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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