Hollysys stock jumps after revealing buyout bid at a 69% premium
Shares of Hollysys Automation Technologies Ltd rose 10.1% in premarket trading Monday, after the China-based automation control systems company revealed that it received a buyout bid that would value the company at about $1.53 billion. The company said a buyer consortium submitted in December a bid to buy Hollysys in a "friendly negotiated merger" for $25 a share in cash, which represents a 69.4% premium to Friday's closing price of $14.76. In a letter to Hollysys's board, the consortium, which includes Recco Control Technology Pte. Ltd. and Dazheng Group (Hong Kong) Investment Holdings Co. Ltd. said it was "very confident" that all necessary regulatory approvals will be obtained in a timely manner. "As our consortium includes a Chinese state-owned strategic investor in the same and adjacent industries, we envision a transaction with our consortium will generate synergies for the Company, and we foresee no impediments to effectively integrating our respective businesses and organizations," the consortium's letter said. Hollysys shares have tumbled 26.2% over the past three months while the iShares MSCI China ETF has lost 12.4% and the S&P 500 has slipped 3.2%.
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