IJM plummets 16% as Sunway’s takeover bid hits potholes

Bursa suspends intra-day short-selling of stock, which recoups much of its losses to close 15 sen down.

The proposed takeover of IJM Corp by Sunway Bhd has come under criticism by certain quarters. (Bernama pic)

PETALING JAYA:

 IJM Corp Bhd tumbled as much as 16% today as Sunway Bhd’s bid to acquire the construction and property group for RM11 billion encountered severe headwinds.

The share price plunge resulted in Bursa Malaysia suspending intra-day short-selling of the stock. Short-selling will only be activated at 8.30am tomorrow.

The shares fell as much as 46 sen or 16.4% to RM2.34 – a three-month low – before clawing back much of its losses to close at RM2.65, a 5.4% or 15 sen drop for the day.

At this price, the group is valued at RM9.67 billion. Despite today’s drop, IJM shares have risen nearly 15% year to date.

Last Monday, Sunway served notice of its conditional voluntary takeover offer to acquire all of the 3.5 billion IJM shares at RM3.15 per share.

The offer price will be satisfied via 10% cash and 90% in the form of new Sunway shares at an issue price of RM5.65 each.

The offer is conditional on Sunway receiving acceptances of more than 50% of IJM’s voting shares by the closing date.

Rising opposition to Sunway’s bid

Investors may have been spooked by two recent developments related to IJM. Over the weekend, certain quarters criticised the proposed takeover of IJM by Sunway.

Umno Youth chief Dr Akmal Saleh questioned why this was being conducted when IJM has been profitable and effectively managed.

In a TikTok reel, he said the proposed takeover may seem like an ordinary transaction, but it involves public, government and Bumiputera economic interests.

He said government-linked entities EPF, Perbadanan Nasional Bhd, Retirement Fund Inc (KWAP), Lembaga Tabung Haji, and the Armed Forces Fund Board (LTAT) held almost half of IJM’s shares.

Akmal also pointed out that Sunway is controlled by Jeffrey Cheah, who holds a 0.5% direct interest and a 60% indirect stake in the group.

He argued that if IJM were to be sold to Sunway, “Bumiputera stakes in major companies in the country could be lost”.

Meanwhile, the Malaysian Businessmen and Industrialists Association also objected to the proposed takeover, saying the deal undermines national interests, undervalues IJM and threatens Bumiputera equity as well as public funds entrusted to government-linked investment institutions.

Its president, Azamanizam Baharon, urged Prime Minister Anwar Ibrahim yesterday to intervene in the deal to prevent a “major and historic policy mistake”.

MACC’s money laundering probe

News also broke out that the Malaysian Anti-Corruption Commission is looking into allegations of a RM2.5 billion money laundering scheme involving executives in IJM.

The news portal Scoop quoted a source as saying that two officials at IJM had been identified by MACC as “persons of interest”, but both were currently overseas.

The investigation was launched after the UK’s Serious Fraud Office probed suspected corruption and money laundering involving multi-billion-ringgit investments involving the duo.

The source said MACC was still gathering information on the allegations, and that the agency has approached Sunway to assist in its investigation.

Sunway’s shares edged up 5 sen or 0.9% at RM5.58, valuing the group at RM38 billion. - FMT