Singapore Airlines Ltd., Southeast Asia’s biggest carrier, is offering to pay S$453 million ($322 million) to buy shares of its low-cost unit it doesn’t already own and take it private, as it tries to enhance operations across its networks.
Singapore Airlines, which owns 55.8 percent of Tiger Airways Holdings Ltd., is offering to pay 41 Singapore cents in cash for each share, the carriers said in a joint statement to the city-state’s stock exchange Friday. That is 32 percent higher than Thursday’s close of 31 cents. Tiger Airways’s shareholders will also have the option of buying Singapore Airlines shares at S$11.1043 apiece, a 0.4 percent discount to Thursday’s close.
“Tiger Airways’ development potential is limited without deeper integration with the SIA Group to build a strong foundation for growth over the long term,” Singapore Airlines Chief Executive Officer Goh Choon Phong said in a separate statement. “We believe our Offer to Tiger Airways shareholders is compelling as a significant premium is being offered.”
Singapore Airlines posted profit that more than doubled after adding Tiger Airways’s earnings into its own account. Net income for the Singapore Airlines group jumped to S$213.6 million in the quarter ended September, from S$90.9 million a year earlier, it said in a statement Thursday. Analysts were expecting S$157.3 million, according to the average of three estimates compiled by Bloomberg. Sales dropped 1.5 percent to S$3.84 billion.
Singapore Airlines shares have fallen 3.9 percent this year, while Tiger Airways climbed 17 percent. The Singapore benchmark Straits Times Index lost 10 percent. Both stocks were suspended on Friday for the announcement.
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