'We're using our own cash', says Idris Jala on IJM deal

 

Sunway co-chairman Datuk Seri Idris Jala, during a press conference on the proposed conditional voluntary take-over offer for IJM Corp Bhd at Sunway Resort Hotel, Sunway City Kuala Lumpur. NSTP/MOHAMAD SHAHRIL BADRI SAALI

KUALA LUMPUR: Sunway Bhd will fund the cash portion of its proposed takeover of IJM Corp Bhd using its own resources, dismissing speculation that it would rely on IJM's balance sheet.

Sunway co-chairman Datuk Seri Idris Jala said concerns that the group would tap IJM's cash to finance the 10 per cent cash component of the offer were unfounded.

"We are not using IJM's cash to offer the 10 per cent that is referred in the prospectus. We're using our own cash to make that offer," he said at a media briefing.

He said IJM holds about RM2.2 billion in cash but carries more than RM6 billion in borrowings, while Sunway has about RM6.7 billion in cash reserves.

Idris, a former minister in the Prime Minister's Department, said the offer structure, comprising 10 per cent cash and 90 per cent in shares, is designed to allow IJM shareholders to retain exposure to long-term value creation.

He pointed to Sunway's track record, highlighting that over a 10-year period the group delivered total shareholder returns of about 387 per cent, compared with a roughly nine per cent decline for IJM.

"If a shareholder invested RM1,000 in Sunway in 2016, that would have grown to about RM4,870 by 2025. The same investment in IJM would have declined to about RM910," he said.

He said the data shows Sunway has consistently outperformed IJM and its peers in terms of value creation.

Idris said the proposed combination would allow both companies to leverage their respective strengths and generate synergies across operations.

"We are very confident that together we will be able to grow as a national champion so that the IJM shareholders are also happy and the shareholders in Sunway are also happy," he said.

On the offer price, he described it as fair, citing analyst target prices for IJM ranging between RM2.60 and RM3.50, with a consensus close to Sunway's offer price of RM3.15.

He said higher valuations cited by some parties were based on assumptions that depend on execution and market conditions.

"The reality today is that you must look at the past as proof of your track record that you can deliver," he said. - NST