SOME minority shareholders remain unhappy with the revised offer price for Tiger Airways, said the Securities Investors Association Singapore (SIAS), which has advised minority shareholders to revisit the independent financial report before making up their minds.
On Monday night, Singapore Airlines (SIA) upped its offer for Tiger from 41 Singapore cents per share to 45 cents per share.
In a note on Tuesday, SIAS chief David Gerald said SIAS was pleased that SIA responded favourably to its appeal on behalf of Tiger Airways' minority shareholders by raising its offer and extending the offer period to Jan 22.
"Nevertheless, some minority shareholders are still not satisfied and have voiced their concerns that the offer still undervalues what long-term shareholders have paid and have been seeking advice from SIAS on how they should proceed," he continued. "SIAS can only assist shareholders to make an informed decision but not advise on how they should vote."
He went on to spell out the different scenarios, noting that if SIA garners over 90 per cent of Tiger, it can delist the budget carrier. However, shareholders who do not accept the deal still remain shareholders and would have "difficulty" in trading shares since Tiger is not listed. Under the Singapore take-over code, a shareholder would still have an additional three months to tender his Tiger shares to SIA, if he wanted to. SIA would then have to honour the original offer price during the three months.
If a shareholder wishes to sell his shares after the three months, he would have to find a buyer privately.
In the second scenario, Tiger could remain listed if the deal goes flat. But Tiger's share price "would be determined by market forces and it may or may not go below the offer price", Mr Gerald pointed out.
SIA is keen to integrate Tiger within the group for greater efficiency and flexibility.
"To not be able to achieve this could possibly lead to less efficient use of resources and potentially lower profitability. While fuel prices have fallen, helping to boost the bottom line, the operating environment is still challenging with rising competition from other low cost carriers and other regional airlines," Mr Gerald added.
Those who have been hoping for an upward revision to the original offer price are well-advised to revisit the IFA report before making up their minds, he concluded.