Malaysian state-linked investor Permodalan Nasional Bhd. (PNB) has rejected the 11 billion ringgit ($2.8 billion) bid by Sunway—the flagship company of billionaire Jeffrey Cheah—for construction firm IJM Corp., whose board had recommended shareholders reject the offer.

PNB—IJM’s second-largest shareholder with a 13.5% stake—deemed Sunway’s offer of 3.15 ringgit a share too low compared to the intrinsic value of IJM shares, Bernama news agency reported late Monday, citing a PNB statement. The investor also........

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