Singapore Air Raises Tiger Air Bid in Push to Delist Company

  • Higher offer extended to Jan. 22 from Jan. 8, statement says
  • Singapore Air does not intend to raise `final' offer

Singapore Airlines Ltd. raised its offer for Tiger Airways Holdings Ltd. by almost 10 percent, offering shareholders in the unprofitable budget airline an improved deal after a lobby group urged Southeast Asia’s largest carrier to sweeten its bid.

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

SIA 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 the airline’s board to consider improving the Tiger Air offer, noting that SIA 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. “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.”

SIA Shares

Shares of SIA fell 1.9 percent to close at S$10.99 on Monday after dropping 3.5 percent in 2015. Tiger Airways was unchanged at 41 cents, valuing the company at S$1.03 billion ($723 million). 

SIA, which owns 55.8 percent of Tiger Air, said in November that it will also offer shareholders of the budget carrier an option to buy SIA 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.

Before it's here, it's on the Bloomberg Terminal.