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

By Svea Herbst-Bayliss

NEW YORK (Reuters) – Recco Control Technology Pte Ltd and Dazheng Group Investment Holdings Company Limited offered to pay $1.64 billion to acquire Hollysys Automation Technologies, 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 Ascendent 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.

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.

(This story has been refiled to correct the spelling of Ascendent in paragraph 4)

(Reporting by Svea Herbst-Bayliss; Editing by Chris Reese)