SIA's offer for Tigerair fair and reasonable: IFA

THE independent financial adviser (IFA) to the board of Tiger Airways Holdings has recommended that shareholders accept Singapore Airlines' (SIA) offer, calling it "fair and reasonable".

In November, SIA had launched a conditional general offer for the shares it doesn't own in Tiger at 41 Singapore cents per share. It also included an option for Tiger shareholders to subscribe to SIA shares at S$11.1043 per share.

In a circular on Wednesday, Maybank Kim Eng Securities - the IFA appointed to evaluate the offer - said "we advise the independent directors to recommend that shareholders accept the offer, unless shareholders are able to obtain a price higher than the offer price on the open market, taking into account all brokerage commissions or transaction costs in connection with open market transactions".

Where the holders of perpetual convertible capital securities (PCCS) were concerned, the IFA also deemed the PCCS offer "fair and reasonable".

"We also note that as the PCCS offer price is calculated on a 'see-through' basis, the consideration a PCCS holder would receive from accepting the PCCS offer would be the same as if the PCCS holder were to convert the PCCS and accept the offer," it said.

The IFA also recommended that optionholders accept the options proposal set out by SIA, or sell their shares, after exercising their options, in the open market if they can do so at a price higher than the offer price after deducting expenses.

Tiger's independent directors also said that they concur with the IFA's assessment and recommend that shareholders, PCCS holders and optionholders accept the offer.

This recommendation comes two weeks after the Securities Investors Association (Singapore) or SIAS had flagged Tiger's minority shareholders' concerns that SIA's offer price to delist and privatise the budget carrier was "not reasonable".

"The offer price is 39 per cent lower than what long-term minority shareholders paid," SIAS chief David Gerald had said then.

SIA's offer price of 41 Singapore cents per share represents a 32 per cent premium over the last traded price of Tiger's shares on Nov 5, the day before the offer announcement was made.

The deadline for acceptances of the offer is Dec 28, 2015, at 5.30pm.