Share
KUALA LUMPUR (April 6): Sunway Bhd’s (KL:SUNWAY) bid to take over IJM Corp Bhd (KL:IJM) has failed, after it failed to meet the conditional requirement of securing an over 50% stake in the latter.
As at 5pm on April 6, the closing date of the offer, Sunway had received acceptances amounting to only 33.43%.
The much-debated RM11 billion takeover offer of IJM by Sunway, announced mid-January, proposed a cash consideration of 10% (31.5 sen per IJM share) and 90% in new Sunway shares, or about 0.501 Sunway shares valued at RM5.65 apiece for every IJM share.
The deal, pitched at a 28% premium to IJM’s market price at the time, would have involved an issuance of about 1.76 billion new Sunway shares and expenditure of about RM1.1 billion in cash.
Sunway had signalled from the outset that it would not revise its terms, stressing that the proposal was “its best and final offer”.
Investors have largely unwound the takeover-fuelled rally.
IJM shares closed five sen higher at RM2.36 on Monday, valuing the group at RM8.61 billion. The stock had surged to RM2.97 immediately after the announcement, but has since retreated to its pre-offer range of RM2.20 to RM2.40.
Sunway shares, meanwhile, slipped four sen or 0.8% to RM4.99, trimming its market capitalisation to RM33.96 billion. The stock had traded near RM5.60 before the deal was announced, reflecting investor caution over the failed acquisition.
It should be noted that Sunway recently listed its healthcare arm Sunway Healthcare Holdings Bhd (KL:SUNMED) at RM16 billion in market capitalisation mid-March.
Sunway’s response
In a press statement, Sunway said: “We respect the decision of IJM shareholders and the outcome of the process. In any transaction of this scale, differing perspectives are natural and we acknowledge the robust public discourse that has accompanied the offer.”
The company added that its proposal was guided by a clear and consistent principle: the enlarged group would create long-term, strategic and sustainable value for all stakeholders.
“It was structured to enable shareholders to participate in the future growth of a larger, more resilient national entity, anchored on strong fundamentals and a proven track record of delivery,” it said.
Sunway also thanked stakeholders for engaging constructively, noting that the level of debate underscored both the importance of the transaction and the strength of Malaysia’s capital markets.
IJM’s response
In a statement on Monday, IJM CEO and managing director Datuk Lee Chun Fai said that with the conclusion of the takeover offer by Sunway, IJM will continue to move forward with resolve, executing an enhanced strategy to deliver the value of its portfolio across the group’s core businesses.
There are four core divisions at IJM — construction, property development, industry and infrastructure.
“Our priority now remains on execution and unlocking the value of the portfolio we have built.
“IJM has always been, and remains, a fundamentally strong company with a clear strategy and a resilient pipeline. Our shareholders have decided, and we respect the conviction they have placed in IJM's long term intrinsic value,” Lee said.
IJM also thanked its shareholders for their continued engagement and considered assessment of the offer by Sunway.
“The company, underpinned by a record RM17.3 billion order book and a proven track record in advancing national infrastructure and driving economic development, remains well-positioned to capture sustained earnings contribution from assets transitioning through their development and operational cycles. This growth trajectory is further bolstered by its strategic investment properties and expanding international portfolio,” Lee adds.
In an interview with The Edge, IJM’s management outlined its plans to unlock shareholder value within the next three years, with initiatives including rationalising its India portfolio, a potential listing of the construction division, and the sale or listing of tolled road assets.
Lee said IJM will expedite its plans to list its businesses to unlock their value. By doing so, the valuation of each business will not be muddied by others in a conglomerate set-up.
“Because when you put everything in the basket — you get highways, projects, companies that are doing well, and also maybe like our Indian operation, which is not doing so well. So when you add everything together, you have an averaging effect,” he said.
He pointed out that, quoting Rothchild, the valuation of IJM is between RM4.80 to RM5.63 per share, which is way above Sunway’s offer price.
IJM previously maintained that it is at a different stage of its investment cycle, with infrastructure concessions transitioning from development into operational phases. The group has argued that assessments based solely on current margins or short‑term earnings do not adequately reflect the long‑term value or upside potential of these assets.
..........
Get EdgeProp's inaugural monthly print edition! Free delivery is available for selected regions. Subscribe now.
