Singapore Airlines (SQ, Singapore Changi) has launched a take-over bid for budget carrier Tigerair (Singapore Changi). Having secured a 55.8% stake in Tigerair last year, Singapore Airlines is now planning to acquire the outstanding 44.2% therefore bringing the LCC under its complete control.
A filing with the Singapore Stock Exchange shows Singapore Airlines is offering Tigerair shareholders SGD0.41 (USD0.29) in cash per share thus valuing the carrier at SGD1.02 billion (USD718.08 million) in total and the stake at SGD453 million (USD322 million).
If successful, Singapore Airlines plans to delist Tiger Airways following a string of quarterly losses blamed on over expansion in an increasingly competitive market.
"We believe that full integration with the SIA Group represents the best option to strengthen Tiger’s future growth prospects by allowing for more commercial and network integration, and operational and backroom synergies," Goh Choon Phong, the chief executive officer (CEO) of Singapore Airlines, said.
Singapore Airlines says it plans to enhance cooperation between Tigerair and its longhaul budget subsidiary Scoot (TR, Singapore Changi) subsidiary wherein the former will feed the latter's short-haul regional traffic. Tigerair operates one A319-100 and twenty-three A320-200s on flights to forty-one destinations in China, India, Indonesia, the Philippines, Bangladesh, Malaysia, Thailand, Vietnam, Hong Kong, Taiwan, Macau, the Maldives, and Myanmar.
"We also believe that Tiger’s prospects to grow independently are limited in the highly competitive LCC landscape in Southeast Asia. The early benefits to Tiger from being part of the SIA Group have already been demonstrated. Feed that Tiger gets from Scoot, and the feed that Tiger provides to Scoot, is important for the long-term success of both carriers, and for the all-important development of the Singapore Changi hub."
The offer is conditional on Singapore Airlines and its associates owning more than 90% of Tigerair stock by the close of the offer.
