Singapore Airlines reportedly said it would take Tiger Air private after more than 90 percent of Tiger's shareholders accepted its $802.4 million offer for the budget airline.
Singapore Airlines, which already owns a 40 percent stake in the low-cost carrier, had raised its offer for Tiger Air to 45 Singapore cents ($0.32) a share in January. It had originally offered Tiger Air 41 Singapore cents ($0.29) for each share in November.
Under Singapore takeover laws, a company has to acquire at least 90 percent of a target company to take it private. Singapore Airlines reportedly received acceptances from holders of about 93.8 percent of Tiger Air's shares, as of Feb. 5.
The closing date for buying Tiger Air shares would be extended to Feb. 19 and trading of Tiger Air shares would be suspended thereafter, Singapore Airlines said. Tiger Air is restructuring its operations, including canceling unprofitable routes and cutting capacity, but posted losses in nine of the past 12 quarters, according to Bloomberg.
“It is an encouraging move by SIA [Singapore Airlines] and this, together with the deadline extension, would prompt minority shareholders to reconsider their positions,” David Gerald, president of the Securities Investors Association Singapore, told Bloomberg. The organization had asked Singapore Airlines board to consider improving its Tiger Air offer in October, as Singapore Airlines had paid 56.5 Singapore cents a share to raise its stake in 2014.
On the earnings front, Singapore Airlines almost doubled its third-quarter profit compared to a year ago, helped by lower fuel prices, the company said Thursday. However, the carrier, considered a benchmark for Asia's full-service airline industry, added that it expected the challenging operating environment in the airlines sector to persist.