Shares of IJM Corporation Bhd climbed to a more than four-month high on Tuesday following Sunway Bhd’s proposal to acquire the construction group in a cash-and-share deal valued at over RM11 billion.
IJM rose 19 sen or 6.9% to RM2.94 — its highest level since August — giving it a market capitalisation of RM10.7 billion. In contrast, Sunway shares slipped 12 sen or 2.1% to RM5.48, valuing the group at RM37.3 billion.
Under the proposed voluntary takeover offer (VTO), IJM shareholders will receive RM315 in cash and 501 Sunway shares for every 1,000 IJM shares held. If completed, the enlarged group would rival Gamuda Bhd as Malaysia’s largest construction company by revenue.
Analysts largely favour acceptance, Kenanga dissents
Most research houses have recommended that IJM shareholders accept Sunway’s offer of RM3.15 per share, describing it as fair and providing valuation certainty. However, Kenanga Research stands out as the sole major dissenting voice.
Kenanga advised shareholders to reject the offer, arguing it is below its RM3.40 target price for IJM and that the share-swap element overvalues Sunway. It noted that Sunway’s implied issue price of RM5.65 reflects a calendar year 2026 price-earnings ratio of 27.6 times, compared with 19.4 times for IJM under the offer.
Based on Kenanga’s Sunway target price of RM4.73, the implied value of the offer for IJM would be only RM2.69 per share, below both its current market price and Kenanga’s target.
Strategic upside highlighted
Other analysts view the VTO as reasonable, pointing to IJM’s ability to monetise its investment at a fair valuation while gaining exposure to Sunway’s larger, more diversified earnings base.
TA Securities said the offer’s valuation is broadly in line with IJM’s historical price-earnings multiples and close to its net asset value, making it attractive despite some analysts’ target prices sitting slightly above the offer.
The transaction values IJM at around RM11 billion, with consideration comprising 90% new Sunway shares and 10% cash. Completion is subject to regulatory and shareholder approvals, including a minimum acceptance level of 50% plus one share, with completion targeted for the third quarter of 2026.
Analysts also highlighted potential earnings accretion and synergies, including scale benefits, bulk procurement savings and operational efficiencies. They added that IJM could benefit from Sunway’s internal property development pipeline, which offers more predictable margins than open-tender construction projects.
Sunway has indicated it does not intend to maintain IJM’s listing status, with analysts flagging possible consolidation of overlapping construction, manufacturing and quarrying operations following the deal’s completion.
