SUNWAY, IJM SHARES RISE ON POSITIVE SENTIMENT OVER MERGER PROPOSAL

KUALA LUMPUR, Jan 13 (Bernama) -- Sunway Bhd and IJM Corporation Bhd were among the most active counters, trading higher at mid-afternoon, following the positive sentiment on a potential merger between the two companies.

At 3.40 pm, the share prices of Sunway and IJM increased two sen and nine sen to RM5.62 and RM2.84, respectively, with 17.78 million and 90.18 million shares traded.

It was reported that Sunway proposed a conditional voluntary takeover offer to acquire IJM’s entire 3.51 billion shares at an offer price of RM3.15 per share.

“Assuming full acceptance of the proposed offer and no adjustments are made to the offer price, the total consideration for the proposed offer will be approximately RM11.0 billion, which will be satisfied via a combination of cash and the issuance of new ordinary shares in Sunway,” Sunway said.

Barring any unforeseen circumstances, Sunway said the proposed offer is expected to be completed by the third quarter of 2026 (3Q 2026).

In a note today, MBSB Investment Bank Bhd said that IJM’s takeover is expected to benefit Sunway, as the enlarged entity can generate synergies from similar businesses in property development and construction, thereby achieving greater economies of scale and cost synergies.

It said the acquisition of IJM would give Sunway exposure to the infrastructure segment, particularly toll roads and ports. At the same time, its property division would see its landbank expand by between 1,341.8 and 2,299.7 hectares, enhancing the potential gross development value of IJM’s landbank.

“The offer price for IJM shares of RM3.15 per share is at a 14.5 per cent premium to IJM’s last traded price, and we think that the valuation premium could be due to the group’s diversified business portfolio.

“We maintain our earnings forecast for Sunway for the financial year 2025/2026/2027, and keep our target price at RM5.34, pending the completion of IJM’s acquisition, which is expected in 3QFY2026,” it added.

Meanwhile, in a separate note, RHB Investment Bank Bhd said the merger makes sense, as it would help Sunway ramp up its market capitalisation, reduce competition in the construction sector and strengthen its market position in Iskandar Malaysia through the acquisition of IJM’s existing landbank in Johor.

“Sunway will also be able to capture the positive spillover from the East Coast Rail Link with IJM’s Kuantan Port, thereby benefiting from the recurring income stream and cash flow,” it said.

-- BERNAMA