Singapore Air Offers To Buy Rest Of Tiger

Singapore Airlines has launched an offer to buy the shares of Tiger Airways that it does not already own in a deal that values the budget carrier at about SGD$1.02 billion (USD$725.46 million).

SIA said it intended to privatise the carrier as it "lacks the scale and network" to effectively compete with the likes of Malaysia's AirAsia, Qantas's Jetstar unit, Indonesia's Lion Air and Philippine airline Cebu Pacific.

SIA is offering SGD$0.41 a share in cash for the 44.2 percent of Tiger Airways it does not already own, as well as an option to subscribe for SIA shares at SGD$11.10 per share.

Tiger would benefit from being fully integrated into the group which includes long-haul, low-cost carrier Scoot and full-service regional airline SilkAir, SIA said.

Scoot and Tiger have been working together in some aspects of their network and marketing activities over the last year, and SIA hinted that its low-fare units would be more closely integrated in future.

"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," SIA chief executive Goh Choon Phong said in a statement.

Tiger operates Airbus A320s and was set up by SIA and Singapore's national investment firm, Temasek Holdings, in 2004.

In recent years, amid intense competition and huge losses, it has pulled out of its joint ventures in Australia, the Philippines and Indonesia to concentrated on the Singapore market.

SIA became its majority share-holder in December 2014 after a rights issue.