Malaysian billionaire Jeffrey Cheah’s Sunway bids $2.7B for builder IJM to form ‘national champion’

A deal would combine two sizeable Malaysian builders and property players at a time when contractors are competing for scale, financing and technical talent to pursue larger infrastructure and advanced technology facility projects.

Sunway said on Monday in a stock exchange filing that an enlarged group could deliver procurement savings and operational efficiencies, while a bigger equity base and free float could broaden investor appeal and lower the cost of capital.

“The successful completion of the proposed offer will establish an enlarged conglomerate involved in property development and construction in Malaysia which, based on revenue and asset base, would create a national champion,” it said.

Sunway said the proposed group would have total assets of RM57.8 billion, which LSEG data showed would place it among Malaysia’s larger listed property-and-construction groups, behind diversified conglomerate YTL.

The offer prices IJM’s shares at RM3.15 each, a 14.5% premium to the stock’s last close on Friday.

IJM shareholders are being offered 10% in cash and 90% in newly issued Sunway shares, implying RM0.315 in cash and RM2.835 in Sunway shares per IJM share, based on RM5.65 for the new Sunway shares.

Completion by third quarter

Assuming full acceptance, the total consideration will comprise RM1.10 billion in cash and the issuance of 1.76 billion shares, Sunway said, adding it holds no IJM stock.

The offer is conditional on Sunway receiving acceptances that take it above 50% of IJM’s voting shares, as well as approvals including from the acquiror’s shareholders.

Sunway said the cash will be funded through borrowing and/or internally generated funds.

Sunway said it may seek to delist IJM if public float requirements are not met following the offer and it may pursue a compulsory acquisition if it reaches the 90% threshold. It expects completion by the third quarter of 2026.