IJM Shares Down In Early Trade, Sunway's IJM Takeover Attempts Lapse

KUALA LUMPUR, April 7 (Bernama) -- Share prices of IJM Corporation Bhd declined in early trade on Tuesday, while Sunway Bhd shares were marginally higher as Sunway’s conditional voluntary general offer (VGO) had lapsed after failing to meet the condition of securing over 50 per cent shareholders’ acceptance level in IJM.  

Earlier, trading in the securities of IJM Corp and Sunway in Bursa Malaysia was halted from 9 am to 10 am today.

As of 10.45 am, Sunway added one sen to RM5, with 868,200 shares traded, while IJM fell five sen to RM2.31 with 1.1 million units changed hands. 

Hong Leong Investment Bank Bhd (HLIB) opined that the unsuccessful takeover attempt by Sunway lengthened the value crystallisation timeline for IJM Corp shareholders.

“However, it is understandable that IJM’s strategic shareholders may be taking the longer-term view for a larger upside as the group aims to execute on a slew of value unlocking exercises as mentioned in its independent advisor’s briefing earlier.

“These include highways monetisation, listing of its construction arm and India portfolio rationalisation. In any case, the takeover attempt has created a strong sense of urgency for IJM’s management and board to expedite these initiatives, in our view,” the investment bank said in a research note today. 

HLIB viewed the takeover attempt as having created a strong sense of urgency for IJM’s management to expedite its value-unlocking initiatives.

It added that the spin-off listing of IJM’s construction arm required the group to demonstrate solid margin execution, increasing data centre exposure and a robust order replenishment outlook.

Meanwhile, MBSB Investment Bank Bhd said potential upcoming job awards for IJM were likely to come from data centre projects in the Klang Valley and Johor, and it was also potentially securing a share in major infrastructure works, particularly the RM5 billion-RM6 billion Penang Mutiara Line LRT cross-sea package, which could meaningfully boost order book visibility. 

-- BERNAMA