What happened 

Shares of Hollysys Automation Technologies (NASDAQ:HOLI) 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.

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