Game of chicken could result in more than just ruffled feathers

A GAME of chicken is playing out between Singapore Airlines (SIA) and the minority shareholders of Tiger Airways - one which could take the bite out of Tiger's restructuring efforts.

The airline group has been facing an uphill struggle to delist and privatise the budget carrier after its initial general offer price of 41 Singapore cents roused the ire of Tiger's long-term shareholders. While that offer represented a 32 per cent premium to the price Tiger's shares were trading at before the offer, it is a far cry from Tiger's initial public offering price (IPO) of S$1.50. Also, Tiger shareholders who came in at this price and subscribed to all three rights issues since the IPO are said to have paid an average of S$0.67 a share.

As the Securities Investors Association Singapore (SIAS) pushed for a better deal on behalf of these shareholders - and as acceptances fell short of levels required for delisting - SIA was forced to up the ante and raised its offer price to 45 cents per share.