THE Securities Investors Association Singapore (SIAS) has raised the concerns of Tiger Airways' minority shareholders with Singapore Airlines, flagging that SIA's offer price is not reasonable for long-term minority shareholders.
Earlier this month, SIA launched a conditional general offer for the shares it doesn't own in Tiger at 41 Singapore cents per share. SIA also threw in an option to subscribe for SIA shares at S$11.1043 per share.
The group currently owns a near 56 per cent stake in the budget carrier.
The offer price of 41 cents per share represents a 32 per cent premium over the last traded price of Tiger's shares on Nov 5, which was a day before the announcement was made.
But, in a statement issued on Tuesday afternoon, SIAS highlighted that a Tiger shareholder who came in at the IPO price of S$1.50 share and subscribed to all three rights issues since IPO would have paid an average of S$0.67 a share.
"The offer price is 39 per cent lower than what long-term minority shareholders paid. This offer, the minority feels, is not reasonable," said SIAS chief executive David Gerald.
Mr Gerald went on to add: "While SIAS understands that the current market conditions are different, nevertheless, the minority shareholders' interest must be taken into account. Therefore, SIAS calls upon the board of Tiger Airways to carefully review the SIA offer to ensure that the minority is dealt with fairly."
In his statement, Mr Gerald also advised minority shareholders to wait for the report from the independent financial advisor to determine the fairness of the offer.
[Amendment note]: In the earlier version, we said that SIAS took Tiger's minority shareholders' concerns to Tiger's board, when it actually flagged their concerns with Singapore Airlines.