Singapore Airlines' bid to take Tigerair private not yet cleared for takeoff

National carrier Singapore Airlines (SIA) owns, controls or has agreed to acquire about 74.5 per cent of shares in Tiger Airways - short of the 90 per cent it requires to take the budget airline private.

The shortfall could explain SIA's decision to extend its offer to buy Tigerair shares from its original deadline of Monday, Dec 28, to Jan 8 instead.

In a filing to the Singapore Exchange website at 6.21am on Tuesday (Dec 29), SIA said that it owned or controlled about 1.86 billion shares as of 5pm on Monday. Its offer saw acceptances for about 469 million shares, or 18.76 per cent of Tigerair stock, as of Monday.

The Singapore flag carrier is offering Tigerair shareholders S$0.41 a share, a 32 per cent premium to Tigerair’s closing price of S$0.31 the day before the deal was announced. The offer also comes with an option to subscribe to SIA shares at S$11.1043 a share.

The offer, which SIA said it will fund through internal cash resources, values the budget airline at about S$1.02 billion. 

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. The flag carrier held a stake of 55.8 per cent of Tigerair prior to the offer.

The Securities Investors Association (Singapore) had previously asked the SIA board to consider extending the Dec 28 deadline and improving the offer price.
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SIA, Tigerair's majority shareholder, wants to delist and privatise the low-cost carrier as part of a plan to improve cooperation among airlines within the SIA Group.