Buyer Consortium Commences a Solicitation of Consents from Shareholders of Hollysys Automation Technologies to Seek Support on Shareholder Resolutions Regarding its $17.10 Per Share in Cash Acquisition Proposal - Seite 4

Shareholders may be wondering how the Board can just “sit on” the Acquisition Proposal for five months doing NOTHING, while misusing the Company’s money and resources to its heart’s content and why the Consortium cannot simply acquire control of the Company by purchasing shares from the open market or launching a tender offer.

In fact, this is because the Company has strongly and egregiously entrenched itself against shareholders’ interests. The Company has an active “poison pill” that prohibits anyone from becoming a shareholder of 15% or more of the outstanding shares without the Board’s approval. The pill on its face would be triggered even by the Consortium’s commencement or announcement of a tender offer, whether or not the Consortium ultimately accepts the shares. Additionally, after we submitted our initial acquisition proposal in December 2020, on January 7, 2021 the Board hastily passed, without shareholder approval, highly objectionable amendments to the Company’s already extremely board-friendly charter.

As such, the Acquisition Proposal cannot proceed unless shareholders are able to deliver a strong mandate to the Board that it must take immediate action to enable the Acquisition Proposal to move forward.

How You Can Support the Acquisition Proposal

Please submit your consent by following the instructions on the enclosed WHITE consent card by signing, dating and returning the WHITE consent card in the postage-paid envelope provided. Given the urgency of the situation, please return your signed WHITE consent card to us as soon as possible before July 22, 2021.

What Happens if the Consortium Obtains Insufficient Shareholder Consents

Although the Consortium is committed to consummating the Proposed Acquisition, we may have to abandon it if we cannot timely obtain sufficient shareholder consents. The Company’s value is diminishing rapidly. Unless the Proposed Acquisition can be executed and consummated quickly, the fundamentals of the Company may soon no longer justify a purchase price of $17.10 per share.

By way of example, on December 21, 2020, J.P. Morgan’s analysts report provided forecast of the company’s stock price at $16.10 per share. J.P. Morgan subsequently lowered it to $15 per share in its analysts report issued on March 30, 2021 and maintained its $15 per share forecast in its analysts report issued on May 14, 2021. Relatedly the Company’s stock price has been performing poorly, far below $17.10.