Singapore Airlines (SIA) should consider improving its buyout offer for Tiger Airways, said the Securities Investors Association Singapore (Sias) yesterday.
On behalf of Tigerair's long-term minority investors, Sias president and chief executive David Gerald has written to SIA "to put forward their case for a revised offer".
Sias also wants the deadline for accepting the offer to be extended from Dec 28 to Jan 11 in the light of the holidays.
SIA, which already owns 55.8 per cent of Tiger Airways, made a $453 million takeover offer for the rest of the airline on Nov 6. It aims to delist and privatise the budget carrier.
It is offering 41 cents per share in cash - 32.3 per cent higher than Tigerair's closing price of 31 cents on Nov 5.
However, the offer price is around 70 per cent below Tiger Airways' initial public offering price of $1.50 in 2010.
Under the offer, Tigerair shareholders can opt to subscribe for SIA shares at $11.1043 each.
Mr Gerald said in his letter that Sias is concerned 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," he said.
Maybank Kim Eng Securities, which was appointed as the independent financial adviser for the general offer, said earlier this month that SIA's offer was "fair and reasonable".
However, Mr Gerald said its report "unfortunately did not take the long-term shareholders' views" into consideration. A question on the minds of these investors, Mr Gerald said, is: "Can SIA do better?"
The minority shareholders noted that SIA was prepared to pay $0.678 per share when it bought out Temasek Holdings' 7 per cent stake in Tiger Airways in 2013 but is reluctant to pay the same to minority shareholders to take it private now.
"They also point out to us that SIA paid $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 said it hopes SIA will consider improving its offer, "perhaps, a compromise, taking into consideration what SIA last paid for Tiger shares".
This is not the first time Sias has weighed in on the matter.
On Nov 24, it issued a statement raising similar concerns of minority shareholders of Tiger Airways.
It called upon the board of Tiger Airways to "carefully review the SIA offer to ensure that the minority is dealt with fairly".
SIA told The Straits Times it would provide a response on Monday.
Tigerair shares closed unchanged at 41 cents yesterday.