SIAS issues guidance to minority shareholders after SIA increases offer

Sias issued a guidance to minority shareholders of Tiger Airways after SIA raised its offer for the budget airline.
Sias issued a guidance to minority shareholders of Tiger Airways after SIA raised its offer for the budget airline.PHOTO: ST FILE

SINGAPORE - The Securities Investors Association Singapore (Sias) on Tuesday issued a guidance to minority shareholders of Tiger Airways, after Singapore Airlines (SIA) lifted its offer for the budget carrier yesterday ( Jan 5).

SIA had raised its buyout offer for Tigerair from 41 cents a share to 45 cents, and added that this would be its final offer.

Sias president and chief executive David Gerald noted in a statement that some Tigerair investors are still not satisfied with the new offer and have voiced their concerns that it " still undervalues what long term shareholders have paid".

"(They) have been seeking advice from Sias on how they should proceed. Sias can only assist shareholders to make an informed decision but not advise on how they should vote," Mr Gerald said.

SIA held nearly 56 per cent of Tigerair when it announced its takeover bid of 41 cents a share on Nov 6. It aims to delist the carrier and fully integrate it within the SIA group.

The cuttoff for acceptances, which was initially extended from Dec 28 to this Friday (Jan 8), has been pushed back to Jan 22 with the revision of the offer.

SIA's takeover is conditional on it owning more than 90 per cent by the close of the offer.

As at 5pm on Dec 28, SIA and its concert parties have 74.5 per cent of Tigerair.

In Sias' statement on Tuesday, Mr Gerald laid out various scenarios for minority shareholders to consider.

Giving assurances to shareholders who had previously accepted SIA's offer, Mr Gerald said they would be entitled to the revised offer of 45 cents per share.

For investors who do not accept the offer, they will continue to remain as shareholders of Tiger Airways, if SIA manages to hit the threshold of 90 per cent and privatise the budget airline.

However, Sias notes that they would have difficulty in trading their shares when the company is delisted.

Under the Singapore take-over code, these shareholders will have an additional three months to decide to tender their Tiger Airways shares to SIA, and SIA will have to honour the original offer price.

"After this three month period, SIA is not obliged to accept his Tiger Airways shares, and he will continue to remain a Tiger Airways shareholder as an unlisted company. Then if the shareholder wishes to sell, he will have to find a buyer privately and have to determine the price as well. To do so will not be easy," Mr Gerald added.

Should SIA fail to achieve the 90 per cent needed to take Tiger Airways private, then the Tigerair counter will continue to be listed on the Singapore Exchange.

Minority shareholders who did not accept the offer will remain shareholders of Tiger Airways as a public listed company, but the share price would be determined by market forces, Sias added.

Mr Gerald said: "Whether SIA can achieve its 90per cent threshold, would very much depend on those who have been hoping for an upward revision to accept the current revised offer. They are well-advised to revisit the IFA (independent financial adviser ) report before making up their minds."

Maybank Kim Eng Securities had been appointed as the independent financial adviser for the general offer.

Tigerair shares were up 4 cents to 45 cents on Tuesday (Jan 5).