Singapore Airlines announces Tigerair takeover bid

SINGAPORE – Singapore Airlines (SIA) on Friday, November 6 announced a full takeover bid for its struggling budget carrier subsidiary Tigerair and vowed to redevelop it as an integral part of the group's portfolio.

SIA currently owns 55.8% of Tigerair and the "voluntary conditional general offer" is for the shares it does not already own valued at around SG$453 million ($322 million).

The airline said it intends to delist the budget carrier from the stock market.

"SIA's objective for the offer is to derive enhanced commercial and operational synergies through a full integration of Tiger Airways into the SIA Group," the airline said in a statement.

"SIA believes the offer will benefit shareholders of both Tiger Airways and SIA."

The airline is offering Tiger shareholders a price of SG$0.41 per share in cash and an option to subscribe for SIA shares at SG$11.1043.

SIA shares closed at SG$11.15 apiece on Thursday before the carrier announced that its second quarter net profit more than doubled. (READ: Singapore Airlines second quarter net profit more than doubles)

Tiger shares closed at SG$0.31 on Thursday, meaning SIA's offer price carries a 32% premium over that.

SIA said its offer will be funded from its "internal cash resources."

The airline on Thursday said its net profit in the 3 months to September soared 135% to SG$213.6 million from the previous year, boosted by higher dividends from long-term investments and the absence of share loss from associated companies after it classified Tiger as a subsidiary. –