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KUALA LUMPUR (April 7): IJM Corp Bhd (KL:IJM) said it will move forward with the execution of its proposed strategy to deliver value across its portfolio, after the majority of its shareholders rejected Sunway Bhd's (KL:SUNWAY) takeover offer.
"Our shareholders have decided, and we [IJMs board members] respect the conviction they have placed in IJM's long-term intrinsic value," said IJM group CEO and managing director Datuk Lee Chun Fai in a statement on Monday.
"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," Lee said.
IJM previously pushed against the Sunway offer by proposing to spin off in two years its highway concessions that include the Sungai Besi Expressway and Kajang-Seremban Highway, as well as to list its construction division as well.
Sunway's offer — 31.5 sen cash per IJM share plus 501 Sunway shares for every 1,000 IJM shares held — was deemed not fair and not reasonable by the independent adviser M&A Securities, who described IJM as currently being in an "active value-creation process" and yet to fully realise its potential.
IJM has an outstanding order book of RM17.3 billion, with a pipeline of property development and overseas expansion, alongside infrastructure concession portfolio that includes highways at home and abroad.
The offer valued IJM at RM3.15 per share or about RM11 billion, and Sunway at RM5.65 per share based on the issue price of the consideration shares.
The deal fell through after Sunway secured just 33.43% acceptance for its takeover offer from IJM shareholders, versus its target of securing a majority stake in the construction and infrastructure group.
Shares of IJM settled at RM2.36 on Monday.
Sunway, in a separate statement, said it respects the decision of IJM shareholders, adding that 'differing perspectives are natural'.
"From the outset, our proposal was guided by a clear and consistent principle that 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 group will "continue to build on our strengths, pursue opportunities with discipline, and remain committed to creating long-term value", it added.
The enlarged group — whose revenue would rival Bursa Malaysia's largest construction firm Gamuda Bhd (KL:GAMUDA) — would have seen shareholders participate in the future growth of "a larger, more resilient 'national entity'", said Sunway.
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Sunway fails in bid to take over IJM
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