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Update 9.55pm: Adds Hollysys’ rejection of the consortium’s offer.
Hollysys (NASDAQ:HOLI) quickly increased by 0.8% after a consortium led by Dazheng Group revealed it had improved its takeover offer.
In recent days, the group raised its offer for Hollysys to $29.50 per share compared to a previous offer of $29. in December, according to declaration on Monday.
The consortium said in the statement that it had held discussions with the company to improve its offer, although they failed to reach an agreement.
“These efforts have proven futile, prompting the Consortium to pursue remedies against what it perceives as a problematic and ill-intentioned sales process,” the consortium said in the statement.
Hollysys (HOLI) confirmed in a statement late Monday that it had rejected Dazheng Group’s improved offer.
“The Special Committee has no confidence in the certainty of Dazheng’s equity financing nor its ability to successfully close a transaction, given its evolving equity syndicate structure, including the last-minute introduction of a new member who is purportedly now its main source of financing is equity financing but without an adequate financing arrangement to ensure certainty of funds,” Hollysys said in the statement.
The latest update comes after Hollysys said in late December that it had not received any offers believed to be higher than the $26.50 share sale to Ascendent Capital.
Representatives of the Dazheng and Hollysys (HOLI) consortium did not immediately respond to requests for comment from Bloomberg.
“We remind shareholders that a superior proposal is more than just a higher prime price, but is also necessary to demonstrate, among other things, financial commitment and a viable path to closing the transaction,” a spokesperson for Hollysys (HOLI). at the moment.
The consortium has secured financing from an institutional investor and banks, according to a Bloomberg report on Monday, which broke news of the bid increase. The latest offer carries a breakup fee of 1 billion yuan ($139 million).
The offer also comes after proxy firms ISS and Glass Lewis last week recommended holders of Hollysys (HOLI) vote to reject the deal with Ascendent Capital.
Hollysys (HOLI) holders will vote on Ascendent Capital Partners’ $26.50 stock deal on February 8.