SINGAPORE: Singapore Airlines (SIA) on Monday raised its offer for shares of budget carrier subsidiary Tigerair it does not already own after minority shareholders said they wanted a higher price.
SIA remains short of the 90 percent acceptance needed to seal the deal since it launched its takeover bid on November 6, aiming to redevelop the struggling low-cost carrier as an integral part of the group’s portfolio.
SIA is now offering S$0.45 per share, representing a nearly 10 percent increase over its previous “voluntary conditional general offer” price of S$0.41 a share.
The new offer price values Tigerair at approximately S$1.125 billion ($790 million).
Shareholders also have an option to subscribe for SIA shares at S$11.10 per share. SIA said its offer remains conditional upon the airline owning more than 90 percent of Tigerair by the new closing date of January 22.
SIA has said it intends to delist Tigerair from the stock market after the deal is completed.
The new price offer comes after SIA said last month that it owns, controls or has agreed to acquire 74.5 percent of Tigerair, up from the 55.8 percent it owned when it launched its takeover bid.
But minority shareholders had asked SIA to improve its offer price.
“Shareholders who have already accepted the [original]offer will be paid the new offer price, subject to the 90 percent acceptance condition being achieved,” SIA said in a statement.
Airline officials said the new offer will be final.
“As the 2016 work year begins, we are providing Tiger Airways shareholders certainty with the new offer price of S$0.45, which will not be revised further,” SIA chief executive Goh Choon Phong said.
Tigerair went public six years ago, with a maximum initial offer price of S$1.65, but the airline was hobbled by a string of losses as competition in the Southeast Asian low cost carrier market intensified.
A strategy to expand the Tigerair brand to Australia, Indonesia and the Philippines failed.
SIA, which is also facing tough challenges from Middle Eastern carriers and budget airlines, already has in its stable Scoot, a medium-haul budget carrier, and full-fare SilkAir, which serves leisure destinations in Asia.