Sunway’s acquisition of Ipoh Engineering—why is the EPF in the spotlight?

(Kuala Lumpur, Jan 13)
Sunway Group’s proposed RM110 billion takeover of IJM Corporation may hinge on the stance of the Employees Provident Fund (EPF) and the Retirement Fund Incorporated (KWAP), whose support is widely seen as pivotal to the success of the mega deal.

Following Sunway’s announcement of a full takeover offer, IJM is expected to convene an extraordinary general meeting (EGM) to seek shareholder approval. Given that EPF and KWAP are among IJM’s largest shareholders, their voting decisions are likely to significantly influence the outcome.

According to IJM’s FY2025 annual report (financial year ended June 30, 2024), the company’s top 30 shareholders are all institutional investors, collectively holding 60.14% of the company’s shares.

Institutional backing in focus

Based on the latest shareholding disclosures, EPF holds 645.01 million IJM shares, representing an 18.40% stake, while KWAP owns 337.90 million shares, or 9.64%. Together, the two government-linked funds control more than 28% of IJM’s equity.

As such, many minority shareholders and institutional investors may look to EPF and KWAP for guidance when casting their votes at the upcoming EGM.

Should either or both funds withhold support, Sunway could face significant challenges in crossing the critical 50% plus one share threshold required to complete the takeover and potentially privatise IJM.

Deal structure and scale

On January 12, Sunway issued a conditional takeover offer to acquire all remaining IJM shares through a combination of share issuance and cash, valuing the deal at approximately RM110 billion.

Under the proposal, IJM shareholders are offered RM3.15 per share, with 90% of the consideration to be settled via newly issued Sunway shares and the remaining 10% in cash. This translates into 501 Sunway shares plus RM315 in cash for every 1,000 IJM shares held.

Upon completion, the merged entity is expected to have a market capitalisation of approximately RM48 billion, making it the eighth-largest listed company on Bursa Malaysia.

The combined group’s land bank would expand to 5,685 acres, with a total gross development value of RM118.1 billion, while its outstanding construction order book would rise to around RM13 billion — ranking it as the second-largest in Malaysia’s construction sector.