Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Hollysys Automation Technologies Shares Popped 17.8% Today

By Travis Hoium - Dec 8, 2020 at 3:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A buyout offer is on the table.

What happened 

Shares of Hollysys Automation Technologies ( HOLI -0.14% ) jumped by as much as 17.8% in trading Tuesday after the company received a buyout offer. Shares were up by 13.9% at 3:20 p.m. EDT and holding fairly steady. 

So what

Management disclosed in an SEC filing that they have received a non-binding acquisition offer from a consortium group that includes co-founder and former CEO Baiquing Shao. The bid is for $15.47 per share, which is still about 8.5% higher than where shares were trading late Tuesday afternoon.

Worker programming a robotic arm.

Image source: Getty Images.

This is a non-binding offer, so it could be pulled at any time. But given Shao's history with the company, it should be taken seriously. What we don't know is if Hollysys's management is interested in the offer at all, or if they think they can negotiate a higher price for the company. 

Now what

The pop in the price of this industrial stock isn't surprising given the buyout offer -- but an offer is not an agreement. Investors should keep an eye on how negotiations unfold because the range of potential outcomes stretches from the suitors being rebuffed to Hollysys bargaining for a better offer.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Hollysys Automation Technologies Ltd. Stock Quote
Hollysys Automation Technologies Ltd.
HOLI
$14.83 (-0.14%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.