Singapore Airlines has made an offer to buyout shareholders of low-cost unit Tigerair, which would allow it to be further integrated into the SIA Group.

SIA is offering shareholders of Tiger Airways, the name under which Tigerair is listed on the Singapore Stock Exchange, S$0.41 ($0.29) per share, says SIA in a statement. This is a 32% premium to Tigerair’s closing price of S$0.31 on Thursday 5 November.

Alternatively, shareholders can subscribe to SIA shares at S$11.1 per share. SIA shares' last close was $11.02.

SIA will fund the takeover with cash.

Flightglobal Dashboard indicates that SIA owns 55.8% of Tigerair’s shares, while private investors own 44.2%.

SIA has been steadily increasing its stake in the low cost carrier, as it seeks to further integrate it into the SIA Group, and in particularly long-haul, low-cost unit Scoot.

“SIA has demonstrated repeatedly that we are committed to the development of Tiger Airways,” says chief executive Goh Choon Phong. “We have been involved in Tiger Airways since its establishment and have supported Tiger Airways through challenging times. Today’s Offer shows that we have its long-term success in mind.”

“Tiger Airways’ success is closely linked to it being part of the SIA Group through our portfolio strategy, in which we have investments in both the full-service and low-cost aspects of the business. Tiger Airways has done well in its restructuring to improve its financial position, but we believe that Tiger Airways’ development potential is limited without deeper integration with the SIA Group to build a strong foundation for growth over the long term.”

Source: Cirium Dashboard