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- If successful, the combined entity would rival Gamuda Bhd, Malaysia’s largest construction firm by revenue.
KUALA LUMPUR (Jan 13): IJM Corporation Bhd (KL:IJM) shares jumped to their highest in more than four months on Tuesday, after Sunway Bhd (KL:SUNWAY) proposed to acquire the group in a cash-and-share deal worth over RM11 billion.
IJM shares gained 19 sen or 6.9% to RM2.94 — their highest since August — valuing the construction group at RM10.7 billion, while Sunway slipped 12 sen or 2.1% to RM5.48, translating into a market capitalisation of RM37.3 billion.
Under the terms of the proposed deal, each 1,000 shares of IJM entitles its holder to RM315 in cash and 501 Sunway shares worth RM2,835. If successful, the combined entity would rival Gamuda Bhd (KL:GAMUDA), Malaysia’s largest construction firm by revenue.
Majority of analysts say to accept Sunway's offer except Kenanga
While a majority of analysts recommend IJM shareholders accept Sunway's RM3.15 per share takeover offer, deeming it fair, Kenanga Research stands as a notable dissenter.
Kenanga advised shareholders to reject the offer, arguing it falls below its RM3.40 target price and that the share-swap component overvalues Sunway.
The implied valuation is unfavourable, with Sunway’s issue price of RM5.65 translating into a lofty calendar year 2026 price-earnings ratio of 27.6 times, compared with 19.4 times CY2026 PER implied by the RM3.15 offer for IJM, said Kenanga in a note.
According to Kenanga, based on Sunway's target price of RM4.73, the implied value of the offer for IJM is only RM2.69, which is below both the current share price of RM2.75 and its TP of RM3.40.
Other firms, however, View Sunway's voluntary takeover offer (VTO) for IJM as fair, recommending that shareholders accept the offer, citing reasonable valuation and long-term upside through participation in the enlarged Sunway group.
TA Securities noted that the offer price implies forward price-earnings multiples broadly in line with IJM’s historical averages and close to its net asset value, offering shareholders an opportunity to monetise their investment at a fair level.
While some analysts’ target prices remain marginally above the offer, they said the premium to recent market prices and valuation certainty justify acceptance.
The VTO values IJM at about RM11 billion, with Sunway offering RM3.15 apiece, comprising 90% in new Sunway shares and 10% in cash.
The offer is subject to a minimum acceptance of 50% plus one share, as well as shareholder and regulatory approvals, with completion targeted for the third quarter of 2026.
Beyond valuation, analysts highlighted the strategic merit of the deal to earnings accretion and meaningful synergies from scale.
The combined Sunway-IJM group would emerge as one of the largest property and construction players in the country, with stronger balance sheets and ability to bid for larger projects.
They added that IJM stands to benefit from improved earnings visibility through access to Sunway’s internal property development pipeline, which typically offers more predictable margins compared to open-tender construction jobs.
Hong Leong Investment Bank sees cost synergies from bulk procurement, vertical integration, and operational efficiencies expected to support margins over the medium term.
“We view the proposed merger as meaningfully de-risking for IJM shareholders, as it provides exposure to a larger, more diversified and higher-quality earnings platform under the Sunway umbrella,” TA added in its Tuesday note.
Sunway has indicated that it does not intend to maintain IJM's listing status, with analysts flagging potential consolidation or overlapping construction, manufacturing and quarrying operations following completion.
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Sunway to acquire IJM Corp in RM11 bil cash-and-share deal
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