Singapore Airlines (SIA) and its concert parties have so far managed to buy or get commitments for only 74.5 per cent or 1.86 billion Tiger Airways shares as of December 28, as part of its efforts to take the budget carrier private, the city-state’s flagship airline said Tuesday.
SIA will have to acquire at least 90 per cent shareholding in Tiger Airways to take it private.
This has also resulted in SIA extend its offer to buy Tiger Airways shares, by more than a week to January 8, from its initial deadline of Monday, Dec 28.
Shares in Tiger Airways closed flat at 40.5 cents on Monday while shares in SIA rose 0.63 per cent to $11.12.
“DBS wishes to announce, for and on behalf of the Offeror (SIA), that the closing date of the offer and the perpetual convertible capital securities (PCCS) offer (and consequently the closing date for acceptances of the Options Proposal) will be extended from 5.30 p.m on 28 December 2015 to 5.30 p.m. on 8 January 2016,” the airline said in a filing with SGX.
In November, SIA has announced it plans to buy all the shares of Tiger Airways that it does not already own, with the aim of delisting and privatising the latter, in a deal that values the budget carrier at about S$1.02 billion ($725.46 million).
At that time SIA already owned 55.8 per cent of the low-cost-carrier, and said it would offer S$0.41 per Tiger Airways share in cash, including an option to subscribe for SIA shares at S$11.10 per share.
The move to extend the deadline comes after the Securities Investors Association Singapore (SIAS) has sought that the carrier provide shareholders more time to take a decision, and also improve the offer price.
“We are concerned only about the long-term Tiger Airways minority investors, who have stayed with the company through thick and thin. These are the shareholders who are not satisfied and may not accept the offer,” David Gerald, SIAS president and CEO had said in a letter to SIA’s chairman and board members earlier this month. Gerald’s letter also pointed out that in the past, SIA had paid more for Tiger Airways’ shares at S$0.678.
“They (Tiger Airways minority shareholders) also point out to us that SIA paid S$0.565 to increase its stake from 40 per cent to 55.8 per cent. This was only possible because minority shareholders had earlier granted a whitewash waiver without making a general offer,” his communication had added.
SIA also owns another budget carrier that operates under the Scoot brand.