Why Sunway's Bid for IJM Corp Collapsed: Inside Malaysia's Biggest Failed Takeover

In January 2026, Malaysian billionaire Tan Sri Dr Jeffrey Cheah made a move few expected: a RM11 billion (roughly USD $2.8 billion) offer through Sunway Bhd to acquire IJM Corp Bhd, one of Malaysia's largest construction and infrastructure companies. Had it succeeded, the combined entity would have rivalled Gamuda Bhd as the country's biggest construction group by revenue.

By April 2026, the deal was dead. Sunway secured acceptances from just 33.43% of IJM shareholders — far short of the 50% threshold needed to proceed — and walked away without revising its offer.

This is the definitive breakdown of what the Sunway-IJM bid actually offered, why it collapsed, and what it means for investors evaluating similar deals in Malaysia's market, where state-linked funds and independent board opinions carry outsized weight.

What Was the Sunway-IJM Bid?

Sunway Bhd, a diversified conglomerate spanning property, healthcare, education, and construction, launched a conditional cash-and-share offer to acquire IJM Corp Bhd in January 2026. The offer required Sunway to obtain more than 50% of IJM's outstanding shares; falling short would trigger automatic withdrawal, which is exactly what happened.

Deal snapshot:

Worked example: A shareholder holding 10,000 IJM shares would have received RM3,150 in cash and 5,010 new Sunway shares. At Sunway's share price at announcement, that share component was valued at roughly RM28,350 — a total package of about RM31,500. Independent advisers argued this was still well below IJM's intrinsic value, which is ultimately what sank shareholder support.

Who Is Jeffrey Cheah, and Why Target IJM?

Tan Sri Dr Jeffrey Cheah founded Sunway Group in the 1970s, growing it from a tin-mining operation into a conglomerate with an estimated net worth of USD $4.9 billion. The IJM approach fit a broader expansion pattern: Sunway had also agreed to acquire Singapore developer MCL Land for SGD 739 million around the same period, signalling regional ambition.

Cheah was direct about the rationale, calling IJM "an attractive asset" available at a price that made commercial sense to Sunway. Whether IJM's shareholders agreed with that valuation was the entire crux of the deal's failure.

Notably, any conglomerate expanding into Singapore's property and construction sector also has to account for structural cost pressures there — including the city-state's deepening energy and cooling crisis, which is reshaping long-term building costs and green-compliance requirements for developers entering the market.

Why Did the Deal Fail? The Five Real Reasons

Unlike many failed bids, this one wasn't sunk by a single factor — five forces compounded:

Acceptance fell well short of the threshold. At close, only 33.43% of shares had been tendered against the required 50%+1.

IJM's board unanimously opposed it. In March 2026, the board — backed by independent adviser M&A Securities — rejected the offer as "not fair and not reasonable," citing a discount of 46.1–51.4% against IJM's estimated intrinsic value.

GLICs didn't bite. Government-Linked Investment Companies — the Employees Provident Fund (EPF), Permodalan Nasional Bhd (PNB), and Kumpulan Wang Persaraan Diperbadankan (KWAP) — collectively held around 45% of IJM. None threw their weight behind the offer, effectively closing off Sunway's path to a majority.

A corruption probe added uncertainty. The Malaysian Anti-Corruption Commission (MACC) and Inland Revenue Board investigated allegations involving roughly RM2.5 billion in overseas assets tied to IJM's non-executive chairman, Tan Sri Krishnan Tan, and adviser Seow Wah Chong. IJM denied wrongdoing, and Krishnan Tan was released within 24 hours on health grounds — but the unresolved probe made institutional holders more risk-averse at exactly the wrong moment.

Sunway wouldn't move on price. Cheah publicly committed to no compulsory acquisition and no price revision. That discipline protected Sunway from overpaying, but it also removed any room to close the gap once sentiment turned against the deal.

How Both Companies Responded

Sunway's public statement was measured: it said it respected shareholders' decision and the outcome of the process, acknowledging the "robust public discourse" the offer had generated — a diplomatic nod to months of controversy, including racially charged social media criticism that Cheah had publicly asked GLICs to disregard in favour of purely commercial analysis.

IJM, meanwhile, is moving forward independently. Group CEO Lee Chun Fai said the company's priority is now execution and "unlocking the value of the portfolio we have built." IJM enters this next phase with:

• An order book of RM4.4 billion in construction contracts
• RM1.59 billion in unbilled property sales
• A free float above 80%, cited by the board as evidence that shareholders didn't need to sell to realise value

The unresolved MACC investigation remains an overhang, and IJM will need to prove it can deliver shareholder returns on its own — its 10-year total shareholder return from 2016–2025 was reportedly negative.

Macro Risks to Watch for IJM Going Forward

Beyond the domestic overhang, large Malaysian infrastructure firms with regional project exposure are also sensitive to external shocks. Ongoing tensions around the Strait of Hormuz, for example, can ripple through fuel prices, materials logistics, and project financing costs for construction companies operating across Southeast Asia — a factor worth tracking for anyone assessing IJM's standalone outlook.

How to Analyse a Contested Takeover Bid: A Practical Checklist

If you're evaluating a similar M&A situation in the future, run through this checklist:

Read the independent adviser's report first. In Malaysia, target-company boards must commission one, and its fair-value estimate is usually the single most decision-relevant number in the entire process.

Map out GLIC or major institutional shareholding early. If state-linked or large institutional funds hold a significant stake, their stance — not retail sentiment — often decides the outcome.

Track trading volumes post-announcement. Unusual institutional activity in the weeks after a bid is announced often telegraphs how major holders are leaning before any public statement.

Factor in prediction markets as a secondary signal. For contested, high-profile deals where analyst opinion is split, prediction markets aggregate real-time, financially-incentivised sentiment and can be a useful cross-check against formal analyst coverage — not a replacement for it.

Assess the deal structure, not just the premium. Cash-and-share offers require you to separately evaluate the acquirer's own share price trajectory, not just the headline premium.

Check for unresolved legal or regulatory risk. Open investigations involving either party should weigh heavily, even if unrelated to the deal's core financial logic.

Common Mistakes Investors Make When Reading M&A Headlines

• Treating "premium" as proof of fairness. A 28% premium over a depressed base price can still be a below-value offer, as the independent adviser's 46–51% discount finding showed here.
• Confusing "announced" with "done." Conditional offers can lapse entirely if acceptance thresholds aren't met, regardless of how the initial market reaction looked.
• Underweighting institutional and political dynamics. In markets with heavy GLIC involvement, financial logic alone doesn't always determine the outcome.
• Ignoring integration risk on the assumption that a deal will close. Even successful mergers face execution risk; pricing that in before a deal even completes is premature.

Conclusion

The Sunway-IJM bid is a useful case study precisely because it failed for structural reasons, not a single misstep: a board that pushed back hard, GLICs that stayed on the sidelines, an unresolved corruption probe, and an acquirer unwilling to sweeten its offer. For investors, the lesson isn't just about this one deal — it's a template for stress-testing any large Malaysian takeover before assuming a headline premium means the deal is done.

FAQs

What was the Sunway-IJM bid?

A RM11 billion (~USD $2.8 billion) cash-and-share takeover offer launched by Sunway Bhd in January 2026 to acquire IJM Corp Bhd. It lapsed in April 2026 after failing to reach the 50% shareholder acceptance threshold.

Why did the Sunway-IJM takeover fail?

Sunway secured only 33.43% acceptance, well below the required 50%. Contributing factors included unanimous board opposition, an independent valuation finding the offer 46–51% below fair value, non-participation from major GLIC shareholders, and uncertainty from an ongoing MACC investigation linked to IJM figures.

Who is Jeffrey Cheah?

Tan Sri Dr Jeffrey Cheah is the founder of Sunway Group, a Malaysian conglomerate spanning property, construction, healthcare, and education. He is estimated to be worth around USD $4.9 billion.

What happens to IJM Corp now?

IJM is proceeding independently, backed by a RM4.4 billion order book and RM1.59 billion in unbilled property sales. The unresolved MACC investigation and the company's weak 10-year shareholder-return track record remain key issues to watch.

Could Sunway bid for IJM again?

Sunway hasn't signalled any intent to return with a new offer, and its public commitment to walk away made a near-term repeat bid unlikely. That said, if the MACC investigation resolves and IJM's share price moves materially, circumstances could change.