Date: January 11, 2016
SIAS notes that SIA has waived the acceptance condition thus declaring the offer for Tiger Airways for $0.45 per share unconditional and extended the offer period to 5 Feb 2016. In addition, as SIA has declared the offer as final, SIA cannot raise the offer price hereafter. Therefore, minority shareholders who have been holding out for SIA to revise the offer upwards would have to now think hard and make a decision which would be favourable to them.
While the offer period has been extended to 5 Feb, minority shareholders who still do not accept the offer by then, would still remain shareholders of Tiger. Whether Tiger remains listed or delisted from the Exchange would very much depend on whether SIA manages to achieve the 90% level to delist Tiger. If it does, then if the shareholder wishes to sell, he will have to find a buyer privately and have to determine the price as well. This will be not an easy task.
Should SIA not achieve the 90% level, then Tiger will continue to be listed. But the share price determined by market forces at that point in time, could go below the offer price, especially, given the adverse current market conditions. Shareholders would also have to contend with lower liquidity as SIA already has 79.22 percent. Since the announcement of the offer for Tiger Airways, the market conditions have worsened and market risk has increased. They need to bear in mind that without the SIA offer, the share price of Tiger Airways was trading at around only $0.30.
Should Tiger Airways minority shareholders not accept the offer, they must weigh the risk of holding on to:
1. potentially owning shares of a delisted company; or
2. shares of Tiger Airways, listed on SGX, with SIA as majority shareholder, with lower liquidity and the share price subject to market conditions whether it is in their favour or not.
David Gerald
Founder, President & CEO
Securities Investors Association (Singapore)
