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KUALA LUMPUR (March 26): Sunway Bhd (KL:SUNWAY) is standing firm on its RM3.15 per share takeover offer for IJM Corp Bhd (KL:IJM), arguing the proposal is fair and backed by independent analyst valuations as well as Sunway's own strong financial track record.
Sunway Group founder Tan Sri Dr Jeffrey Cheah told a press conference on Tuesday that “if we don't get 50% plus one share, we will walk away…we have given the best we can in the offer on the table”, signalling the group will not revise its bid.
The offer represents a compelling opportunity for IJM shareholders to benefit from Sunway’s track record and future growth prospects, he said.
Cheah also stressed Sunway’s confidence in extracting value from IJM’s assets through integration and execution, as he ruled out asset stripping.
“We will analyse it carefully with our experience, see whether we can really extract value — and I think we can, looking at what they have.”
He projected the combined entity’s market capitalisation rising to RM50 billion, given Sunway’s strong brand and management, with the merger positioning it among Malaysia’s largest listed companies at over RM45 billion.
Cheah remained confident that the deal will go through, despite IJM's major shareholder Permodalan Nasional Bhd's (PNB) recent rejection of the offer, suggesting it was a tactical move. “I think they are playing a bit of poker… to drive up the price.”
PNB holds 13.3% of IJM's equity. Shareholders have until April 6 to decide on Sunway's offer.
Sunway shareholders gave their approval for the 10:90 cash-share issuance deal at the group's extraordinary general meeting on Thursday, with 99.27% voting for it.
Late surge expected; acceptance rate at 13% now
Non-executive co-chairman Idris Jala said Sunway has so far secured about 13% acceptances — about matching PNB’s stake — but expects a late surge. “Typically, shareholders only tender their shares closer to the deadline…we anticipate a rush in the next 10 days.”
Sunway's RM3.15 offer is consistent with the weighted average target price of RM3.24 for IJM from 14 independent research houses, he noted, five of which have set RM3.15 as the fair value.
He also pointed to Sunway’s 10-year total shareholder return of 387% versus IJM’s negative 9%, a gap that justifies Sunway's confidence in improving IJM’s performance. “Aligning IJM’s margins with Sunway’s could add RM300 million in annual profit, excluding synergies.”
Idris also dismissed claims that Sunway is using IJM’s cash to fund the acquisition, highlighting Sunway’s RM6.7 billion reserves compared with IJM’s RM2.2 billion.
“We are using our own cash to make that offer,” he said, reiterating that Sunway is aiming for the merger to create a “national champion” by combining complementary strengths across construction, property, infrastructure and healthcare.
Sunway slipped one sen or 0.2% to close at RM5.23 on Thursday, valuing the group at RM35.59 billion. IJM settled two sen or 0.8% lower at RM2.37, giving it a market capitalisation of RM8.65 billion.
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