RHB Investment Research Reports

GHL Systems - Unconditional Mandatory Takeover by NTT DATA

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Publish date: Tue, 28 May 2024, 11:24 AM
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  • Accept the takeover offer of MYR1.08 per share as the offer price implies a 23% premium to our previous TP of MYR0.88 and a 34.5% premium to the 1- year VWAP; at 40.5x FY24F P/E vs historical 5-year mean of 32x. NTT DATA Japan Corporation (NTT) is taking a 58.73% stake from four vendors – triggering the mandatory takeover for the remaining shares. The offer remains open for acceptances until 5pm on the 21st day of the posting date of the Offer Document. Note that the offeror does not intend to maintain the listing status in the event the Public Spread Requirement is not met.
  • Unconditional mandatory takeover. NTT has entered into a share purchase agreement with Actis Stark (Mauritius) (38.58%), APIS Growth 14 (10.04%), Loh Wee Hian (4.77%), and Tobikiri Capital (5.34%) to acquire a total stake of 58.73% (or 670.4m shares) at MYR1.08 per share (total consideration: c.MYR724.1m). Following the share purchase, NTT is obliged to extend the mandatory takeover offer to acquire all the remaining shares not already held at a cash consideration of MYR1.08 per share as the share purchase agreement triggered the mandatory takeover rules based on the Rules On Takeovers, Mergers, And Compulsory Acquisitions.
  • The offer price of MYR1.08 is at 6.9% premium to the last traded price, 14.7% premium to the 5-day VWAP, and 34.5% premium to the 1-year VWAP. The implied valuation is at 48x FY23 P/E and 40.5x FY24F P/E, 16.6x FY23 EV/EBITDA and 14.2x FY24F EV/EBITDA and 2.3x FY23 P/B and 2.2x FY24F P/B.
  • NTT offers consulting, provision of integrated solutions and system and software development, maintenance, and support. NTT operates payment businesses through group companies in Asia, ie VietUnion Online Services (Payoo) in Vietnam, iPay88 in Malaysia and NTT Payment Services India. NTT aims to expand assets, including services and know-how in the payment business, and strengthen business foundations in the ASEAN region.
  • Forecasts and TP. We make no changes to our forecasts but tactically raise our TP to reflect the offer price of MYR1.08 (from MYR0.88). Risks: Non- completion of the deal.

Source: RHB Research - 28 May 2024

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