The directors of Malaysian construction firm IJM Corporation Berhad have advised shareholders to reject a takeover bid from Sunway Group, following a determination by an independent adviser that the offer was “not fair and not reasonable.” The recommendation, issued Friday, throws into doubt one of Malaysia’s largest proposed corporate acquisitions.
Sunway Group launched a $2.71 billion bid for IJM in February, aiming to create a Malaysian construction “champion,” according to Reuters. The offer price was 25.5% higher than IJM’s last traded price before the offer, but the independent adviser, whose name has not been publicly released, concluded that the valuation did not adequately reflect the company’s future prospects.
The Edge Malaysia reported that the independent adviser’s assessment found the offer undervalued IJM’s assets and potential. The assessment is a critical step in the takeover process, as it provides shareholders with an unbiased opinion on the fairness of the deal.
IJM’s board of directors, while acknowledging Sunway’s offer, has now formally urged shareholders to disregard it, aligning with the independent adviser’s findings. The Star | Malaysia reported that the board’s statement emphasized the need to protect shareholder interests.
The potential merger of IJM and Sunway would have combined two of Southeast Asia’s 500 largest companies, significantly reshaping the Malaysian construction landscape, according to Fortune. However, the rejection by IJM’s board and the negative assessment from the independent adviser suggest the deal is unlikely to proceed in its current form.
Nikkei Asia reported that IJM is actively encouraging its shareholders to reject the Sunway bid. The outcome of the takeover attempt now rests with IJM’s shareholders, who will ultimately decide whether to accept or reject Sunway’s offer. No date for a shareholder vote has been announced.
