KUALA LUMPUR (May 28): Shares in GHL Systems Bhd (KL:GHLSYS) rose on Tuesday to their highest in 21 months, after Japanese information technology company NTT Data Corp bought a majority stake in the payment services firm, and triggered a general offer.

GHL Systems rose as much as 6.9% or seven sen to RM1.08, its highest since August 2022. At market close, the stock settled at RM1.05, up four sen or 4.0%, valuing the company at RM1.2 billion.

At least three of six research houses covering the stock are advising investors to accept the buyout, as NTT Data’s offer values GHL at a large premium.

“We advise investors to accept the offer, in light of poor trading liquidity and structural industry-wide pressures posing headwinds to growth,” said Maybank Investment Bank (Maybank IB).

RHB Investment Bank (RHB IB) and Kenanga Investment Bank (Kenanga IB) also recommended that their clients take up NTT Data’s buyout offer.

On Monday, GHL received a notice that NTT Data had acquired a 58.73% stake for RM724.08 million, or RM1.08 per share. Under Malaysian takeover laws, NTT Data will be required to make a general offer to acquire all remaining shares that it does not already own.

NTT Data does not intend to maintain the listing status of GHL, and will withdraw the company’s listing if it manages to get more than 90% of the shares, according to a statement.

The offer values GHL at 39 times the projected earnings for the year ending Dec 31, 2024 (FY2024), said Kenanga IB. That implies a 90%-102% premium to global peers, such as Paypal and Square, which are trading at an average 20.5 times, despite their significantly larger revenue and market capitalisations, the house noted.

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

For RHB IB, the offer price implies a 23% premium to its previous target price of 88 sen, and a 34.5% premium to the one-year volume weighted average price. Further, the offer also values GHL at 40.5 times the projected earnings for FY2024, compared to the five-year mean of 32 times, it noted.