Sunway’s IJM Bid Expands Scale, But Upside Remains Capped

Sunway Berhad’s conditional takeover of IJM Corp at RM3.15 per share expands scale, landbank and infrastructure exposure, but limited valuation upside supports a neutral investment stance for now investors.

Sunway Berhad has launched a conditional voluntary takeover offer for IJM Corp, proposing to acquire all outstanding shares at RM3.15 per share. The consideration combines RM0.315 in cash and RM2.835 via new Sunway shares issued at RM5.65, implying total cash outlay of about RM1.1 billion alongside 1.76 billion new shares.

Sunway Synergies

Strategically, the deal broadens Sunway’s footprint across property development, construction, and infrastructure, adding toll road and port exposure to its portfolio. The acquisition also lifts Sunway’s property landbank to 5,685 acres, potentially enhancing future gross development value.

Financially, the enlarged equity base is expected to lower net gearing to 0.5x from 0.56x, despite partial debt funding. While the offer values IJM at a premium PE of 24.8x, earnings impact for Sunway is modest, with estimated accretion of around 1%.

Overall, long-term strategic benefits are clear, but near-term valuation upside remains limited, supporting a neutral view.

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