Malaysian state-linked investor Permodalan Nasional Bhd. (PNB) has rejected the 11 billion ringgit ($2.8 billion) bid by Sunway—the flagship company of billionaire Jeffrey Cheah—for construction firm IJM Corp., whose board had recommended shareholders reject the offer.
PNB—IJM’s second-largest shareholder with a 13.5% stake—deemed Sunway’s offer of 3.15 ringgit a share too low compared to the intrinsic value of IJM shares, Bernama news agency reported late Monday, citing a PNB statement. The investor also believes in the potential long-term upside of the IJM shares, according to the report.
Last week, IJM’s independent adviser M&A Securities said Sunway’s offer of 3.15 ringgit for each IJM share represents a discount of between 46.1% and 51.4% to the estimated fair value of the shares. The company’s board then recommended that IJM shareholders reject the offer, dealing a blow to Sunway’s plan to create a construction behemoth.
The deal would have created a group with assets of 57.8 billion ringgit, making it one of Malaysia’s largest listed property and construction companies. It would rank just behind YTL Corp., controlled by tycoon Francis Yeoh.
With a real-time net worth of $5 billion, Cheah is one of Malaysia’s wealthiest. Over the past five decades, he has grown Sunway from a small tin-mining company into a major conglomerate with businesses in construction, education, healthcare, infrastructure and property.
He is bulking up Sunway’s construction and property business, including in Singapore, where the group recently agreed to buy MCL Land for S$739 million ($578 million). The group’s healthcare unit, Sunway Healthcare, is set to start trading tomorrow on Bursa Malaysia after raising 2.9 billion ringgit in what is expected to be the country’s largest IPO in almost a decade.
This article was written by Yessar Rosendar from Forbes and was legally licensed through the DiveMarketplace by Industry Dive.