Singapore Airlines raises takeover offer for Tigerair

This photograph taken on November 12, 2015 shows a Singapore Airlines plane parked at the terminal of Changi International airport in Singapore. Airline and travel-related stocks tumbled in Asia November 16 following the deadly terror attacks in Paris, but analysts and industry players said they expect the impact to be short-lived. AFP PHOTO / ROSLAN RAHMAN

SINGAPORE: Singapore Airlines (SIA) on Monday raised its offer for shares of budget carrier subsidiary Tigerair it does not already own after minority shareholders said they wanted a higher price.

SIA remains short of the 90% acceptance needed to seal the deal since it launched its takeover bid on Nov 6, aiming to redevelop the struggling low-cost carrier as an integral part of the group’s portfolio.

SIA is now offering S$0.45 per share, representing a nearly 10% increase over its previous “voluntary conditional general offer” price of S$0.41 a share.

The new offer price values Tigerair at approximately S$1.125bil (RM3.429bil).

Shareholders also have an option to subscribe for SIA shares at S$11.10 per share.

SIA said its offer remained conditional upon the airline owning more than 90% of Tigerair by the new closing date of Jan 22.

SIA has said it intended to delist Tigerair from the stock market after the deal’s completion.

The new price offer comes after SIA said last month that it owned, controlled or had agreed to acquire 74.5% of Tigerair, up from the 55.8% it owned when it launched its takeover bid.

But minority shareholders had asked SIA to to improve its offer price.

“Shareholders who have already accepted the (original) offer will be paid the new offer price, subject to the 90% acceptance condition being achieved,” SIA said in a statement.

Airline officials said the new offer would be final.

“As the 2016 work year begins, we are providing Tiger Airways shareholders certainty with the new offer price of S$0.45, which will not be revised further,” SIA chief executive Goh Choon Phong said.

Tigerair went public six years ago, with a maximum initial offer price of S$1.65, but the airline was hobbled by a string of losses as competition in the South-East Asian low cost carrier market intensified.

A strategy to expand the Tigerair brand to Australia, Indonesia and the Philippines failed.

SIA, which is also facing tough challenges from Middle Eastern carriers and budget airlines, already has in its stable Scoot, a medium-haul budget carrier, and full-fare SilkAir, which serves leisure destinations in Asia.

Analysts say SIA needs Tigerair to complete its portfolio, especially with Singapore building a new terminal to maintain the city-state’s edge as a regional air transport hub. - AFP