Stock Name: IJMLAND
Company Name: IJM LAND BERHAD
Research House: AMMB



IJM Land Bhd is better off without going through the merger with Malaysian Resources Corp Bhd (MRCB) because its valuations would otherwise be severely diluted by the injection of low-yielding assets from MRCB into the enlarged company.

In a report, AmResearch said it could not see how the enlarged entity would offer compelling earnings without the transfer of low-yielding assets out of the enlarged entity.

The latter exercise, it said, was to have taken place post-merger.

On the parent IJM Corp, AmResearch said there were strong catalysts underpinning its share price going into 2011 which included large highway jobs in India and roll-out of six highways including West-Coast Expressways.

IJM Land was sold down (pre-suspension share price of RM2.86) this morning prior to the announcement that the proposed merger with MRCB had been aborted.

IJM Land and MRCB, which were suspended at 11.34am, would resume trading on Monday, Jan 3, 2011.

The proposed merger has been scrapped as both parties were unable to reach an agreement on the definitive terms of the proposed merger.

AmResearch said it would maintain its 'buy' call on IJM Corp Bhd and IJM Land with unchanged price of RM7.52 and RM3.88 respectively. -- Bernama