Sunway is willing to walk away if RM11 billion IJM bid rejected

[KUALA LUMPUR] Sunway Bhd is prepared to walk away from its offer to acquire IJM Corp if the builder’s shareholders do not accept the conglomerate’s deal by the Apr 6 deadline, said Sunway founder Jeffrey Cheah.

“There’s no compulsion for the shareholders to sell to us,” Cheah told reporters on Friday (Feb 27). If IJM shareholders reject the offer, “we walk away,” he said.

Sunway in January offered to buy its smaller rival for RM11 billion (S$3.6 billion), a move that analysts said would allow the group to emerge as the largest property and construction conglomerate group in Malaysia. The offer has since drawn political scrutiny over concerns that it could dilute both the equity interests of the government and the rights of the nation’s indigenous majority.

A politician from a key member of Prime Minister Anwar Ibrahim’s ruling coalition said Malaysia’s majority Bumiputera group’s stakes in major corporations are “already limited” and the merger would reduce that further.

IJM’s operations came under scrutiny amid a probe by the Malaysian Anti-Corruption Commission and tax authorities after Sunway’s bid. The builder has refuted money laundering allegations. Its chairman was recently released from an overnight detention by Malaysian anti-graft officials.

“We are doing it just for commercial purposes. We find that it is an attractive vehicle to have,” Cheah said of Sunway’s offer. It is a transaction between a “willing buyer, willing seller,” he said. BLOOMBERG