IJM Corp Bhd’s management is defending the company’s value and outlining plans to accelerate the unlocking of its assets, following Sunway Bhd’s conditional voluntary takeover offer of RM3.15 per share.
In an independent advice circular (IAC) released on Friday, M&A Securities Sdn Bhd advised IJM shareholders that the offer is “not fair and not reasonable.”
Following the advisory, IJM group chief executive officer Datuk Lee Chun Fai said the company is considering a restructuring plan that could see several of its business segments spun off into separate pure-play listed entities. The move is intended to better reflect the group’s underlying value and address the holding company discount currently applied to IJM’s share price.
Lee said the existing conglomerate structure makes it difficult for individual business segments to be properly valued by the market.
“When everything is put into one basket — highways, construction projects, profitable units and also operations that are not performing as strongly, such as our Indian business — the valuation tends to average out,” he said during an interview at IJM’s headquarters in Petaling Jaya.
He noted that IJM’s construction division is performing strongly, supported by projects including data centres and the New Pantai Expressway (NPE2) extension. However, these strengths may not be fully reflected in the group’s overall valuation under its current structure.
According to Lee, spinning off business segments into standalone listed entities may be the most effective way to unlock the company’s true value.
However, the proposed restructuring would depend on the current board remaining in place. If major shareholders — including the Employees Provident Fund (EPF), Permodalan Nasional Bhd (PNB), and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) — choose to accept Sunway’s takeover offer, the restructuring plan may not proceed.
M&A Securities noted that Sunway’s offer represents a 46.1% to 51.4% discount to the estimated value of IJM shares, which it placed between RM5.84 and RM6.48 per share.
The decision now rests with shareholders, who must determine whether to accept the takeover offer or allow the current management team time to unlock the group’s asset value through restructuring.
