Buyer Consortium Led by Recco Control Technology and Dazheng Group Responds to Hollysys’ Update on Sale Process - Seite 2

An important aspect of any sale process is for a Board of Directors or independent Special Committee to solicit and internalize the views of its shareholders. This sale process is no different. The Consortium believes it is the best course of action for the Hollysys Board and Special Committee to listen to the views of its shareholders. An independent Board elected by shareholders is the best way to ensure unaffiliated shareholders’ interests are protected during this sale process.

In its announcement today, the Board has essentially confirmed that certain shareholders owning nearly a third of shares outstanding have provided updated materials with the proper record date – a date that was set by the Hollysys Board. Now that shareholders have provided the Board with updated materials, the Consortium fully expects the Board to fulfill its fiduciary and legal obligation to convene a special meeting without delay.

Update on Engagement and Legal Due Diligence

As part of an independent and transparent sale process, the Consortium seeks to proactively provide an update to shareholders on recent engagement between the Consortium and the Special Committee. At this time, despite Hollysys announcing the formal sale process over three weeks ago, the Consortium has still been unable to access any due diligence materials from Hollysys.

The Consortium is seeking to enter good faith due diligence and negotiations regarding its US$25 per share all-cash proposal with the Special Committee directly. The Consortium resubmitted it’s offer two months ago, but still the Company has not allowed the Consortium to enter into the due diligence process yet.

The Consortium is seeking to reserve the right to make competing offers to any bids received by the Special Committee and, only if deemed necessary, take a proposal directly to Hollysys shareholders. The Consortium firmly believes that this element of a sale process – the element of fair, transparent, and open competition amongst potential bidders – is crucial to ensuring value is maximized for the shareholders of Hollysys.

Slowing down the legal due diligence process is contrary to the Board’s stated goal of “conducting an expedited process to solicit and review serious and compelling offers”. Instead, it extends the length of the sale process. Additionally, the Consortium notes that any engagement with regards to the sale process should not interfere with the Board’s ability to convene a special meeting in line with the requests of Hollysys shareholders. It is important in this regard for all shareholders to remember that the Company has never held any general meeting of its shareholders since it became a public company.