This article first appeared in The Edge Malaysia Weekly on March 16, 2026 - March 22, 2026
IJM Corp Bhd’s (KL:IJM) board of directors has unanimously recommended that shareholders reject the takeover offer of RM3.15 per share by Sunway Bhd (KL:SUNWAY) on the grounds that the deal is not fair and not reasonable.
The board’s recommendation is in line with the view of independent adviser M&A Securities Sdn Bhd, which pegs the fair value of IJM at between RM5.84 and RM6.48 per share (see “M&A Securities says IJM shareholders should ditch Sunway offer”).
Nevertheless, the board is well aware that IJM’s management needs to do more to convince its shareholders to stand by them.
Putting it bluntly, working hard to replenish its order books locally as well as abroad and completing challenging jobs are not good enough. The group needs to undertake corporate exercises to unlock the value of its assets so that IJM’s shares are priced appropriately. The fact that IJM has become a takeover target is partly because its full value has not crystalised.
In the first interview since Sunway made its move, IJM group CEO and managing director Datuk Lee Chun Fai tells The Edge that the group will expedite its plans to list its businesses to unlock their value. By doing so, the valuation of each business will not be muddied by others in a conglomerate set-up, says Lee, who has been at the helm since April 2023.
“Because when you put everything in the basket — you get highways, projects, companies that are doing well, and also maybe like our Indian operation, which is not doing so well. So when you add everything together, you have an averaging effect,” he points out.
“Our construction segment is actually doing very well with all these data centre [projects] and the NPE2 (New Pantai Expressway extension). Things are looking quite right, but if it’s priced as IJM group, you have the plus and minus.”
Listing of construction and highway operations in two years
There are four core divisions at IJM — construction, property development, industry and infrastructure.
The industry division is mainly driven by Industrial Concrete Products Sdn Bhd (ICP), which is involved in quarrying and manufacturing building materials that complement its construction division by providing a reliable supply chain. The infrastructure division comprises several toll highway concessions, Kuantan Port and the Malaysia-China Kuantan Industrial Park (MCKIP).
The group’s construction division and highway concessions will be the first to undertake listing exercises, which are expected to take place in the next two years, says Lee.
“By listing them as separate entities, the market can capture the value of that on what the market will pay for a pure construction company. Whereas here, the construction business contributes 50% of the earnings. So it becomes an averaging effect. But if you park it as a listed company by itself, it can be priced at an appropriate price-earnings ratio and at the appropriate earnings,” he adds.
IJM owns a 28.2% stake in WCE Holdings Bhd (KL:WCEHB), the concessionaire of the 233km West Coast Expressway that connects Banting in Selangor to Taiping in Perak. The highway serves as an alternative route to the North-South Expressway.
IJM also owns the Sungai Besi Expressway, New Pantai Expressway and Kajang-Seremban Highway in Malaysia, as well as three highways in India and one in Argentina.
For the nine months ended Dec 31, 2025 (9MFY2026), IJM’s toll highway segment registered an Ebitda (earnings before interest, taxes, depreciation and amortisation) of RM190.39 million, up 14.3% from RM166.5 million in the previous corresponding period.
M&A Securities used the discounted cash flow methodology to value the toll highway business of IJM, and arrived at a valuation of between RM3.83 billion and RM4.55 billion.
Construction is IJM’s core business. Lee describes the West Coast Expressway as a challenging project for the group whose construction period has dragged on longer than scheduled due to land acquisition issues. The other landmark project that the group is involved in is the construction of the immigration, customs and quarantine complex (ICQ) for the Johor Bahru–Singapore Rapid Transit System (RTS) Link in Bukit Chagar, Johor Bahru.
“When we look back, we seem like a project rescuer,” he says, implying the group’s capability in executing tough jobs.
For 9MFY2026, the construction business registered an Ebitda of RM164.19 million, a year-on-year increase of 17.6%.
According to Lee, Singapore is expected to be a fresh growth catalyst for IJM’s construction division. “There are a lot of opportunities in Singapore. There are many jobs in the semiconductor industry … and Terminal 5 at Changi Airport,” he says.
IJM has formed a joint venture with its ex-staff for construction jobs in Singapore. The group holds a 45% stake via its subsidiary Hexagon Construction Pte Ltd.
Not all assets are ready to be spun off
Nevertheless, Lee says the port business is not ready for a spin-off as it is still growing with a lot of investments coming in, such as Petroliam Nasional Bhd’s carbon capture and storage project, as well as a refinery and a steel mill as big as the Alliance Steel mill in the MCKIP.
These investments will require IJM to invest about RM500 million to build a new liquid berth at Kuantan Port. Therefore, the business still needs to take on debt, which will affect how much return it can give to shareholders, says Lee.
Some investors see Kuantan Port as being too dependent on Alliance Steel as a customer, as about 40% of its income is derived from the Chinese steel mill. Therefore, IJM will have to grow the port business first so that it has a more diversified client base before floating its shares on the stock exchange.
Meanwhile, the industrial building materials business ICP could be part of the pure-play listed construction business. ICP used to be a listed entity as one of Malaysia’s first and largest manufacturers of concrete piles.
This division is involved in quarrying and manufacturing building materials, providing a reliable supply chain for IJM’s construction operations. The group offers industrialised building system solutions, providing pre-fabricated building components.
Lee explains that it is a bit premature to list its property development business at the moment. He sees the division as being in the stage of incubating assets as IJM is building a lot of investment property, including the 88 Royal Mint Street and 25 Finsbury Circus projects in the UK as well as two warehouses, a hotel and a convention centre in Malaysia. The group is also the developer and owner of Menara Prudential in the Tun Razak Exchange.
“The best way to do it is you need that growth story, you need something that makes sense when you unlock. You’re not doing it for the sake of doing. It has to be strategic and to make sure that it is in the best interests of my shareholders,” says Lee.
IJM will be meeting with its substantial shareholders to present its plan to unlock asset value as M&A Securities’ independent advice circular (IAC) has been released.
The Employees Provident Fund (EPF) holds 20.5% of IJM’s shares, while Permodalan Nasional Bhd (PNB) and Retirement Fund Inc (KWAP) own 13.3% and 9.6% respectively.
IJM’s board will have to convince the government-linked funds that its plan to unlock the company’s embedded value is a better move than accepting Sunway’s offer and becoming a shareholder of an enlarged Sunway group.
“Well, I think for a shareholder to look at this, it’s our job to tell our shareholders how we think we can deliver value to them because they own 100% of us. If they elect Sunway and that exercise is successful, they will only have 20% shareholding,” says Lee.
He argues that the group has been “sowing the seeds” for future growth, which means its full potential is yet to be realised.
Indeed, Sunway’s offer is an indication of the potential asset value that can be unlocked.
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