Sunway Berhad’s Acquisition of IJM Corp Bhd: Deal Details and Market Response

Deal Structure

  • Offer Price: Sunway Berhad has announced a conditional voluntary takeover offer for IJM Corp Bhd at RM 3.15 per share.
  • Total Consideration: The transaction is valued at RM 11 billion (approximately RM 110 billion when expressed in full).
  • Payment Mix: The offer will be settled through 90 % equity (Sunway shares) and 10 % cash.
  • Equity Issuance: Sunway expects to issue ≈ 1.758 billion new shares to IJM shareholders if the offer is fully accepted.
  • Cash Component: Each IJM shareholder holding 1 000 shares would receive RM 315 in cash and ≈ 501 new Sunway shares.

Strategic Rationale

  • Sunway aims to create a larger, more resilient Malaysian champion within the property, construction, and infrastructure sectors.
  • The merger is projected to bring operational synergies, broaden the combined company’s asset base, and strengthen its appeal to institutional investors.
  • The acquisition will also integrate IJM’s capabilities in construction and engineering with Sunway’s existing property development and retail businesses, forming a more diversified conglomerate.

Market Reaction

  • The FTSE Bursa Malaysia KLCI opened the trading day at 1700.74 points, the first time it has surpassed the 1700‑point threshold since March 2019.
  • Sunway’s stock rebounded from a temporary trading halt, opening at RM 5.63—an increase of RM 0.03 (0.54 %) from the previous close.
  • Trading volume for the market that morning was 351.15 million shares with a value of RM 239.34 million.
  • The market exhibited a net 224 gains and 203 declines, indicating a generally positive sentiment towards the acquisition.

Analyst Views

  • Analysts have recommended that IJM shareholders accept Sunway’s offer, highlighting that the transaction is structured to preserve potential upside for existing shareholders.
  • The offer’s equity component is viewed as a mechanism to align the interests of both companies’ shareholders, potentially reducing dilution concerns.

Other Developments

  • Sunway clarified that IJM shareholders who accept the offer will not receive dividends in the form of shares from IJM’s healthcare unit.
  • The Securities Commission of Malaysia (SC) has approved the transaction, allowing the process to proceed under regulatory oversight.

Implications for Investors

  • The acquisition positions Sunway to compete more aggressively in the Malaysian market, potentially enhancing long‑term earnings and shareholder value.
  • Investors should monitor the offer acceptance rate and the integration progress as these factors will determine the ultimate success of the deal.