The board made the announcement after an independent adviser determined that the proposed price undervalues the company, according to Forbes.
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Jeffrey Cheah, founder and chairman of Sunway Group. Photo courtesy of the company |
Sunway’s offer of MYR3.15 per share reflects a discount of between 46.1% and 51.4% to the estimated fair value of the shares, according to adviser M&A Securities.
“The board has concurred with the conclusion and recommendation of M&A Securities that the offer is not fair and not reasonable,” IJM said in a regulatory filing late Friday.
“Accordingly, the board unanimously recommends that the holders reject the offer.”
The adviser also highlighted that IJM shares remain liquid, with a high average free float of over 80%, significantly exceeding the 25% minimum public spread requirement.
This suggests shareholders can readily sell their holdings in the market without accepting the offer.
Sunway said in late January it would proceed with the bid despite IJM being under investigation by Malaysia’s anti-graft agency over allegations tied to a MYR2.5 billion money-laundering scheme.
The probe followed criticism that the takeover could dilute government equity stakes and undermine the rights of indigenous investors.
If successful, the acquisition would allow Sunway to merge with IJM, forming a construction giant with combined assets of MYR57.8 billion ($14.7 billion), positioning it among Malaysia’s largest listed property and construction groups.
With an estimated net worth of $4.9 billion, Cheah is the fifth richest individual in Malaysia. He has been seeking to bolster Sunway’s construction arm as the group expands its property footprint into Singapore.
Sunway recently agreed to acquire developer MCL Land for SGD739 million ($578 million) from Hongkong Land Holdings, strengthening its presence in the city-state.
Over the past five decades, the self-made tycoon has grown Sunway from a small tin-mining operation into one of Malaysia’s largest conglomerates, with interests spanning construction, education, healthcare, infrastructure and property.
Sunway Healthcare is expected to debut on Bursa Malaysia on Wednesday after raising MYR2.9 billion in its initial public offering, marking what is considered the country’s largest IPO in a decade.
