This article first appeared in The Edge Malaysia Weekly on January 19, 2026 - January 25, 2026

Whether or not Sunway Bhd (KL:SUNWAY) is successful in taking over IJM Corp Bhd (KL:IJM), it will never be the same again for the latter.

Firstly, this is because IJM will always be a target company from now until the management can convince its institutional shareholders that it can create better value and deliver higher returns than any others keen to take over the company.

If it is not Sunway, then it will be another company that sets its sights on IJM. As it stands now, Sunway has made an offer of RM3.15 per share but no one can rule out the possibility of a competing offer cropping up.

Past major corporate takeovers have shown that competing offers tend to materialise in the middle of the exercise. This happened in the last major corporate takeover when a consortium controlled by Khazanah Nasional Bhd with the Employees Provident Fund (EPF) privatised Malaysia Airports Holdings Bhd.

In the current situation, there could be competing offers because there is value to be unlocked in IJM, whose major shareholder is EPF, which, together with Kumpulan Wang Persaraan (Diperbadankan), Permodalan Nasional Bhd and Lembaga Tabung Haji, controls more than 40% of IJM.

The break-up value of IJM is much higher than its share price and Sunway’s offer price, which is the second reason why IJM will not be the same again after this latest development.

Construction is IJM’s mainstay and it is one of the three main players in the sector at present, apart from Gamuda Bhd (KL:GAMUDA) and Sunway’s subsidiary, Sunway Construction Group Bhd (KL:SUNCON). This means both IJM and Suncon will be competing for jobs in the same space.

Nevertheless, IJM’s track record in executing and completing jobs is well known. Unlike other construction companies, it keeps its cost controls tight with project managers having very little authority in approving procurements. Even small expenses have to be approved at several levels.

IJM’s construction arm is supported by wholly-owned Industrial Concrete Products Sdn Bhd (ICP), the largest manufacturer of high-strength concrete piles in the region. ICP also has a plant in southern China that supplies to local projects there.

In the property development space, IJM has townships in Penang, Selangor and Negeri Sembilan that can be easily monetised.

The company’s large highway division and the port in Kuantan are its other assets that can be easily sold off to monetise its investments.

IJM has three highways in the Klang Valley and it is the major shareholder of WCE Holdings Bhd (KL:WCEHB), which owns the West Coast Expressway (WCE) that stretches from Banting in Selangor to Taiping in Perak. In Budget 2025, the government announced an extension of the WCE from Banting to Gelang Patah in Johor on a public-private partnership basis.

This highway is now positioned as an alternative to the North-South Expressway (NSE) but its toll rates are higher than those on the NSE.

So even if IJM remained intact, it is only logical for the management to start monetising the company’s real value.

The much-talked-about proposal to spin off the highways will probably need to be expedited. IJM may even have considered listing the industrial concrete plant to create value for shareholders.

Management will need to find a way to replace earnings lost with the disposal of its plantation division in 2020. This left IJM with some RM150 million less in its bottom line.

Finally, until any takeover of IJM is settled conclusively, the company will not be able to bid for major jobs because those awarding jobs to IJM will have to bear in mind that they could potentially be dealing with a new set of people after six months if Sunway’s bid for IJM is successful.

Even if Sunway’s bid falls through for some reason or other, the fact that IJM is a takeover target will weaken its position when submitting bids for major jobs.

IJM is one of the companies that are driven by professional managers. Its track record in the delivery of projects on time is the result of its culture of training its staff to do so.

Without new jobs, its people will leave. And without its key people, IJM will be a company without a soul.

Sunway’s takeover of IJM comes when the latter’s share price is not high. Sunway cannot be blamed for seizing the opportunity. It is seen as a company that is aggressive in creating shareholder value.

Moreover, the impending listing of its healthcare division has given Sunway’s share price an extra punch.

As for IJM, its fate lies with the four funds. Unless there is an alternative offer, Sunway’s offer cannot be discounted, although the price undervalues IJM.

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