SIAS writes to SIA board to consider improving offer for Tiger Airways

SINGAPORE - The Securities Investors Association Singapore (SIAS), acting on behalf of long-term minority shareholders of Tiger Airways, has written to the board of Singapore Airlines (SIA) "to put forward their case for a revised offer" for Tiger Airways.

The letter, from SIAS' president and chief executive officer David Gerald, on Friday (Dec 18) sought SIA to improve on its offer for its listed subsidiary Tiger Airways, and to extend the deadline for the acceptance of the offer.

SIA's intention is to delist and privatise the budget carrier.

"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," Mr Gerald said.

On Nov 6, SIA made a S$453-million takeover offer for the budget carrier, of which it owns 55.8 per cent.

SIA is offering S$0.41 in cash per share, which was 32.3 per cent higher than Tigerair's closing price of 31 cents on Nov 5.

Tigerair shareholders also have an option to subscribe for SIA shares at S$11.1043 each.

Maybank Kim Eng Securities, which was appointed as the independent financial adviser (IFA) for the general offer, had said earlier this month, that SIA's offer for the budget carrier was "fair and reasonable".

"We are fully aware of the IFA report, which unfortunately did not take the long term shareholders" views," Mr Gerald said.

He added that the question on the minds of longstanding minority shareholders is whether SIA can do better.

They felt SIA was prepared to pay S$0.678 per Tigerair share to Temasek Holdings in 2013, but is reluctant to pay the same to Tigerair minority shareholders to take it private now.

"They 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," Mr Gerald added.

SIAS, an association representing retail investors, noted that the IFA report did not take into consideration these factors.

It also appealed to the SIA board to extend the deadline for acceptance of the offer, which is on Dec 28, by two weeks in view of the holidays.

It is hoped that SIA would consider improving its offer, "perhaps, a compromise taking into consideration what SIA last paid for Tiger shares", Mr Gerald suggested.

He added: "This will pacify disgruntled Tiger shareholders and help SIA achieve the 90 per cent threshold".

On Nov 24, SIAS had issued a statement raising similar concerns of minority shareholders of Tiger Airways.

It had then called upon the board of Tiger Airways to "carefully review the SIA offer to ensure that the minority is dealt with fairly", and advised minority shareholders to wait for the IFA report to determine the fairness of the offer

wongsy@sph.com.sg