Singapore Airlines (SIA) has bowed to investor pressure and lifted its buyout offer for Tigerair from 41 cents a share to 45 cents.
The airline added yesterday (Monday, Jan 4) that this would be its final offer.
The deadline for acceptances, which was initially extended from Dec 28 to this Friday (Jan 8), has been pushed back to Jan 22.
Shareholders who had already agreed to sell at 41 cents will be offered the higher price.
The payment is conditional on SIA obtaining the required 90 per cent of Tiger stock, the airline said.
SIA's revised offer comes after it said on Dec 29 that it owns, controls or has agreed to acquire about 74.5 per cent of the budget carrier's shares. It needs 90 per cent to delist Tigerair.
The aim is to facilitate closer cooperation and integration with other carriers within the group, especially SIA's long-haul, low-cost arm Scoot.
SIA held close to 56 per cent of Tigerair when it announced its takeover bid of 41 cents a share on Nov 6 last year.
That price angered some shareholders and prompted the Securities Investors Association Singapore to step in and urge SIA to consider extending the earlier Dec 28 deadline and improve its offer price. It asked why SIA had been willing to pay more for Tigerair shares in the past. For example, it paid 56.5 cents to increase its stake from 40 per cent to about 56 per cent in late 2014.
In making its final offer yesterday, SIA said the new price, which values the airline at about $1.125 billion, represents a price premium of 45 per cent over the last-traded price of 31 cents before the offer was announced.
Chief executive Goh Choon Phong said: "We are optimistic that with this final upward revision of the offer price, those shareholders who have not already accepted the offer will consider it favourably."
But at least two have already decided not to sell.
Veteran investor and chief executive of consultancy firm Rafflesia Holdings Mano Sabnani, who owns 20,000 shares, said: "I'm not inclined to accept... I was expecting SIA to pitch it at 50 cents a share and be done with it. I think that would have been enough to clinch the deal. But at 45 cents, I think it's touch-and-go. It's hard to say if SIA will succeed in its takeover bid."
Businessman Dennis Tan, who owns 30,000 shares, said: "We shareholders have gone through turbulent times with the airline, when fuel prices were sky high.
"But now the price of oil has come down and times are looking better for Tigerair. After holding on for so long, I don't think this is the right time for us to sell."
