This article first appeared in The Edge Malaysia Weekly on February 23, 2026 - March 1, 2026

GOVERNMENT-linked investment companies (GLICs), which collectively hold nearly 41% equity interest in IJM Corp Bhd (KL:IJM), are unenthusiastic about the takeover offer made by Sunway Bhd (KL:SUNWAY) for the construction giant, according to sources familiar with the matter.

Sunway’s offer is conditional upon acceptance of 50% plus one share. Without the GLICs’ acceptance, Sunway’s chance of taking IJM private at RM3.15 per share via a cash-and-share deal is not good.

The offer entails a cash payout of 31.5 sen and 0.501 new Sunway share, valued at RM5.65 apiece, for each IJM share held. Sunway will issue 1.76 billion new shares at RM5.65 each in addition to paying RM1.1 billion in cash to buy out IJM.

The issue price of RM5.65 values Sunway at RM38.7 billion, inclusive of its 84% equity interest in Sunway Healthcare Holdings Bhd, which will be listed on Bursa Malaysia next month.

A senior officer of a GLIC that holds a stake in IJM tells The Edge its board is not that keen on the offer mainly because it is not a cash deal.

“As GLIC heads, we also speak to each other, so I know that some of the other GLICs are not excited about the offer either. We are not exiting with cash,” he says, noting the GLICs could always buy Sunway shares on the open market after the listing of its healthcare unit.

GLICs with shares in IJM include the Employees Provident Fund (EPF) with a 20.48% stake, Permodalan Nasional Bhd (PNB) with 14.54% via its various funds, Retirement Fund Inc (KWAP) with 9.64%, Minister of Finance Inc-owned Urusharta Jamaah Sdn Bhd (2.84%) and Lembaga Tabung Haji (1.47%).

Interestingly, the EPF has bought more IJM shares since Sunway made its move, raising its stake in the company from 18.4% or 645.01 million shares on Jan 12 when the offer was launched, to 717.85 million shares or 20.48% as at Feb 6.

Some view the EPF’s share purchase as a defensive move.

One sticking point in Sunway’s offer has been its plan to list its healthcare arm, Sunway Healthcare.

Sunway intends to distribute 676.04 million Sunway Healthcare shares to existing shareholders via a dividend-in-specie, based on one Sunway Healthcare share for every 10 Sunway shares held, with the entitlement date yet to be determined.

The dividend-in-specie would be granted prior to the initial public offering (IPO). However, the consideration shares issued to IJM shareholders are not entitled to the dividend-in-specie.

The pegging of Sunway’s shares at a high RM5.65 each has also come under fire considering the stock is trading at such lofty valuations only because of the upcoming IPO of Sunway Healthcare.

IJM has appointed M&A Securities Sdn Bhd as the independent adviser for the Sunway offer. M&A, meanwhile, has sought a time extension until March 16 to come up with the independent advice circular for the board and shareholders of IJM.

IJM shares have not traded above the RM3 level since Sunway announced its takeover bid. The highest they hit was RM2.82 on Jan 16. The stock closed at RM2.67 last Friday, giving the company a market capitalisation of RM9.73 billion.

IJM’s stock has come under pressure recently. Just after Sunway announced its takeover offer, the Malaysian Anti-Corruption Commission (MACC) visited the construction giant’s offices.

IJM’s share price fell as much as 16.4% to a three-month low of RM2.64 when reports of the MACC’s visit surfaced, but rebounded shortly after.

While the MACC’s investigation, which has targeted IJM’s non-executive chairman Tan Sri Krishnan Tan Boon Seng, seems to have thwarted some of IJM’s suitors, others including Sunway are undeterred.

Sunway said its “proposed offer is proceeding in accordance with the Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the Securities Commission Malaysia, and the proposed offer is subject to the approval of the shareholders of Sunway to be sought at an extraordinary general meeting of Sunway to be convened”, indicating its continued interest despite the ongoing investigation.

The Edge understands that YTL Corp Bhd (KL:YTL) and a bumiputera entrepreneur could still be interested in IJM. Whether they choose to pick up just 30% of IJM and control the company without a full-fledged takeover remains to be seen.

Some quarters have noted that IJM chairman Tan was formerly an independent director and chairman of HSBC Bank Malaysia Bhd. This would mean that he would have gone through Bank Negara Malaysia’s stringent vetting process, which may in turn explain the persistent interest in IJM despite the MACC investigation.

There are also questions about Prudential plc, which ceased to be a substantial shareholder on Jan 21 after disposing of 4.19 million shares, via Eastspring Al-Wara’ Investments Bhd’s Managed Funds.

Prudential had emerged as a substantial shareholder in IJM on Dec 19, 2025, with 5.03% equity interest or 176.23 million shares. It had increased its stake to 5.17% or 181.36 million shares by Jan 2 this year before starting to pare it down.

If Prudential still holds a stake in IJM, and it is below the 5% threshold for disclosure, it would be interesting to see how Prudential views Sunway’s offer. And if Prudential is no longer a shareholder in IJM, who acquired its block of shares?

Another point of interest is Sunway’s unit Fortuna Gembira Enterprise Sdn Bhd, which had 180.25 million shares or 5.14% equity interest in IJM but ceased to be a substantial shareholder at end-September 2023.

A perusal of IJM’s annual reports since then does not show that Fortuna Gembira or Sunway are among IJM’s top 30 shareholders. Were these shares sold on the open market and if not, to whom were they sold?

For its six months ended September 2025, IJM posted a net profit of RM161.38 million on revenue of RM3.41 billion.

Its net assets per share stood at RM2.91 as at end-September, but a number of its properties have not been revalued. IJM’s land bank in Seremban, which is more than 122ha and pegged at a net book value of RM641.63 million, has not been revalued since 2004, while its land bank in Kuala Langat, Selangor, which is almost 289ha, has not been revalued since 2014 and has a net book value of about RM2.1 billion.

IJM could also unlock value via the listing of its highways. It owns Besraya (M) Sdn Bhd, the concessionaire for the Sungai Besi Expressway; New Pantai Expressway Sdn Bhd; and Lebuhraya Kajang-Seremban Sdn Bhd. It also holds a 28.12% stake in WCE Holdings Bhd (KL:WCEHB), which controls the West Coast Expressway.

Another IJM unit, Industrial Concrete Products Bhd, or better known as ICP, was a publicly traded company but has since been privatised. The listing of ICP would help to immediately unlock value in IJM. 

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