IJM Can Unlock Value If Sunway Takeover Is Stalled - RHBIB

KUALA LUMPUR, March 16 (Bernama) -- RHB Investment Bank Bhd (RHBIB) believes that if the voluntary takeover (VTO) of IJM Corporation Bhd by Sunway Bhd does not proceed, the status quo would allow IJM to retain opportunities to unlock value.

In a research note today, the investment bank said this could potentially be achieved through initiatives such as the listing of IJM’s construction business and the group’s exit from its India operations, including its toll highway and property assets, within the next two years.

It added that the materialisation of these plans could provide greater visibility on IJM’s standalone value.

RHBIB noted that the VTO provides an opportunity to monetise a portion of their holdings via the cash component while retaining participation in the enlarged Sunway group through the share consideration. 

"As such, the ultimate decision will likely depend on IJM shareholders’ preference between crystallising partial value today and maintaining exposure to the longer term prospects of the combined entity (that is higher gross development value (GDV) per acre). 

"Hence, we retain our target price (TP) of RM3.15 per share which reflects the offer price by Sunway that IJM shareholders may opt for," it said while keeping a “Buy” call for IJM. 

M&A Securities, acting as an independent adviser for IJM, via a March 13 circular, viewed Sunway’s RM3.15 VTO price as “not fair and not reasonable”.

IJM shareholders have until April 6 to reject or accept the takeover offer from Sunway.

The deal would proceed if Sunway tops a 50 per cent acceptance from IJM shareholders.  

-- BERNAMA