SINGAPORE: Flagship carrier Singapore Airlines (SIA) said on Friday (Nov 6) that it has launched a takeover offer for budget airline Tiger Airways.
SIA is currently Tigerair’s largest shareholder with a stake of 55.8 per cent. The intention is to delist and privatise the budget airline through the offer, SIA said.
It is offering shareholders of Tigerair S$0.41 in cash per share, a premium of 32 per cent from the budget airline's last traded price of S$0.31 on Thursday. Tigerair shareholders will also get the option to subscribe for SIA shares at S$11.1043 per share. SIA shares closed at S$11.15 on Thursday.
The offer, which SIA said it will fund through internal cash resources, values the budget airline at about S$1.02 billion.
Both airlines requested for a trading halt on Friday morning before making the announcement through a filing on the Singapore Stock Exchange.
SIA CEO Goh Choon Phong said: “Tiger Airways’ success is closely linked to it being part of the SIA Group through our portfolio strategy, in which we have investments in both the full-service and low-cost aspects of the business."
Tigerair has "done well" in its restructuring to improve its financial position, he added, but its "development potential is limited without deeper integration with the SIA Group to build a strong foundation for growth over the long term”.
“We believe our offer to Tiger Airways shareholders is compelling as a significant premium is being offered and hope that it will be considered favourably,” he said.
The option to subscribe for SIA shares is exerciseable at any time during a 15 market day period, which will commence on a date to be announced by SIA.
The offer is conditional upon SIA and parties acting in concert with it owning more than 90 per cent of Tigerair by the close of the offer and the approval in-principle for the dealing in, listing of and quotation of the new SIA shares.