IJM shares slide following anti-graft probe

KUALA LUMPUR (Jan 20): Shares of IJM Corporation Bhd fell on Tuesday's opening, a day after the company said officers from the Malaysian Anti-Corruption Commission (MACC) and the Inland Revenue Board (IRB) were present at the company’s office on Monday (Jan 19) to "obtain information as part of their process".  

When contacted by The Edge on the same day, MACC chief commissioner Tan Sri Azam Baki confirmed an investigation into the company is ongoing.

The counter fell 5.7% or 15 sen to open at RM2.50 compared to its previous-day closing of RM2.65.

In a bourse statement on Monday, IJM said it was cooperating fully with the authorities and assured that its business operations "are continuing as usual".

The counter fell as much as 16.4% on Monday, prompting regulators to suspend intra-day short-selling of the stock.  

Intra-day short-selling of the stock resumed on Tuesday (Jan 20) at 8.30am.

Sunway Bhd, which announced on Jan 12 its intention to acquire IJM, opened 0.7% or four sen lower to RM5.54 on the news. By noon break it closed 0.5% lower to RM5.55, valuing the company at RM37.5 billion.

Analysts covering IJM flagged possible delays, higher execution risk, and regulatory scrutiny for Sunway’s deal, following the MACC’s and IRB’s actions.

Hong Leong Investment Bank (HLIB) in its note said that in the best-case scenario, the deal could still face delays past the previously planned completion in third quarter of 2026.

In a worst-case scenario, Sunway could either withdraw the offer in writing to the Securities Commission (SC) or fail to get shareholders’ approval at an EGM. This would bar Sunway from making another takeover offer for 12 months.

HLIB noted that under SC rules, an acquirer cannot cancel or withdraw an offer without prior written approval from the SC.

MBSB Research said the ongoing investigation by the MACC may further complicate the conditional voluntary takeover offer by Sunway and weigh on sentiment for IJM.

Both made no changes to their forecasts and reiterated their call for IJM shareholders to accept Sunway’s offer.

Sunway’s offer to acquire all outstanding shares at RM3.15 apiece based on the cash offer portion and Sunway's consideration of IJM shares at an issue price of RM5.65 apiece — is below most analysts’ target prices for IJM.

Despite the price being below target, several analysts recommend that shareholders accept the offer to realise IJM’s value and gain long-term exposure to the larger, combined entity. 

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