Positive view on NTTD Japan buyout offer for GHL

“We deem this as an opportunity for existing shareholders to realise the extensive value of the company,” Kenanga Research said.

PETALING JAYA: The offer price of RM1.08 per share made by NTT Data Japan Corp (NTTD Japan) to existing shareholders of payment service provider GHL Systems Bhd, is a premium compared to its global peers, according to Kenanga Research.

“The offer price of RM1.08 per share translates to 39 times our forecast financial year 2024 (FY24) earnings per share (EPS) and 34 times our FY25 forecast EPS.

“This implies a premium of about 90%-102% compared with its global peers like Paypal, Square, Shift4 Payments, Payoneer Global Inc and Aci Worldwide, which are trading at an average price-earnings ratio (PE) of 20.5 times FY24 EPS and 17 times FY25 EPS, despite having significantly larger revenue and market capitalisations than GHL Systems.

“We deem this as an opportunity for existing shareholders to realise the extensive value of the company,” the research house said.

NTTD Japan, a wholly owned subsidiary of Japan-listed NTT Data Group Corp, recently entered into an unconditional share purchase agreement to buy 58.73% of GHL Systems’ total issued ordinary shares from four parties – Actis Stark (Mauritius) Ltd, APIS Growth 14 Ltd, Loh Wee Hian and Tobikiri Capital Ltd for a cash consideration of RM724.1mil or RM1.08 per share.

NTTD Japan is also offering to buy out the GHL Systems shares not already owned (about 41.27%) at RM1.08 per share and does not intend to maintain the listing status of the company.

The proposed offer is expected to be completed by the third quarter of 2024.

“We rationalise our target price to the offer price of RM1.08 (from RM0.88) and our call to ‘accept offer’ from ‘outperform’,” Kenanga Research said in a research note.

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