What happened

Shares of Chinese automation company HollySys Automation Technologies (HOLI 0.76%) jumped 30% higher on Tuesday after the company said it's weighing a second go-private offer.

So what

HollySys is a provider of automation hardware and software designed to make the industrial and transportation sectors more efficient and improve workplace safety. Last month, the company rejected an offer from CPE Consortium that valued it at $17.10 per share, saying that the offer undervalued HollySys.

A stock chart pointing upward.

Image source: Getty images.

A second group of investors seems to agree with that assessment. Late Monday, Holysys said its board is in the process of evaluating a $23 per share non-binding offer from Superior Emerald Ltd., a consortium controlled by Ascendent Capital Partners and including Changli Wang, who founded HollySys but retired from the company in 2013.

In a statement, HollySys said its board continues to evaluate and consider both the latest offer and the original one with financial advisors and legal counsel. As part of the process, the board has authorized management to enter into a limited period of exclusivity with Emerald "to better assess whether it is in the best interests of the company and its shareholders."

Now what

Shares are higher but still well-below the Emerald offer price. That implies the market doesn't think an eventual offer is a given. It could even suggest that a bidding war between the two consortiums is unlikely.

For investors, it seems dangerous to buy in based solely on the expectations of an eventual takeover. But HollySys still could be an attractive stock.

This largely under-the-radar company now has two investment groups, including one backed by a former insider, who seem to believe the stock was undervalued at its pre-takeover chatter price. If the board ultimately rejects these offers, there's a lot of implied optimism about what the future has in store for HollySys.