Source: Tiger Airways Ltd.

Tiger Air Shares Jump After Singapore Air Raises Buyout Offer

  • Increased offer period extended to Jan. 22 from Jan. 8
  • Singapore Air says it doesn't intend to raise `final' offer

Tiger Airways Holdings Ltd. jumped 9.8 percent after its biggest shareholder Singapore Airlines Ltd. raised a buyout offer for stakeholders following a call by a lobby group for Southeast Asia’s largest carrier to sweeten its bid.

Tiger Air rose 9.8 percent to S$0.45, matching the revised offer price, as of 9 a.m. in Singapore trading. Singapore Air was unchanged at S$10.99.

Singapore Air is offering Tiger Air stockholders 45 Singapore cents, rising from its initial proposal of 41 cents, the company said in a statement to the stock exchange on Monday. The offer, which Singapore Air said it doesn’t intend to revise further, has been extended to Jan. 22 from Jan. 8.

Singapore Air is seeking to delist Tiger Air after it made losses because of over-expansion in a competitive market that has caused other airlines to be privatized or collapse. The Securities Investors Association Singapore, which campaigns on behalf of minority shareholders, last year asked Singapore Air’s board to consider improving the Tiger Air offer, noting that the parent paid 56.5 cents a share to raise its stake in 2014.

“It is an encouraging move by SIA and this, together with the deadline extension, would prompt minority shareholders to reconsider their positions,” David Gerald, president of the Securities Investors Association Singapore, said by phone, referring to Singapore Air as SIA. “SIA likely raised the price because they haven’t reached the 90 percent threshold to delist Tiger and they’re hoping to shore up more support.”

Singapore Air owns 77.5 percent of Tiger Air, based on a company statement. The airline said in November that it will also offer shareholders of the budget carrier an option to buy Singapore Air shares at S$11.1043 each.

Singapore Air injected funds into Tiger Air in 2014 by increasing its stake to include the carrier as a subsidiary. While Tiger Air has reduced capacity, cut routes and ended partnerships in Australia, Indonesia and the Philippines to curb losses, it still reported a loss in the three months ended September.

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