Hot stock: SIA share price up on news of takeover bid for Tiger Airways
SINGAPORE Airlines' (SIA's) share price gained 0.45 per cent or 5 Singapore cents to S$11.20 by 1.10pm on Friday after its shares resumed trading, following news of its voluntary conditional general offer for all the Tiger Airways shares that it does not already own.
SIA had requested a trading halt before the market opened on Friday, and announced its offer for Tiger Airways shares shortly after.
SIA, which currently owns 55.8 per cent of Tiger Airways, intends to delist and privatise the budget carrier.
Tiger Airways had also requested a trading halt on Friday morning before the market opened. Its shares had not resumed trading as at 1.10pm.
SIA is offering Tiger Airways shareholders S$0.41 per Tiger Airways share in cash, as well as an option to subscribe for SIA shares at S$11.1043 apiece.
The offer price represents a premium of 32 per cent, 35 per cent and 42 per cent respectively over the last traded price, the one-month and three-month volume-weighted average prices of Tiger Airways shares, preceding the offer.
"We believe our offer to Tiger shareholders is compelling and hope that it will be considered favourably. We also believe that Tiger's prospects to grow independently are limited in the highly competitive LCC (low-cost carrier) landscape in Southeast Asia," said SIA CEO Goh Choon Phong in an email to SIA group staff on Friday morning.
"The early benefits to Tiger from being part of the SIA group have already been demonstrated. Feed that Tiger gets from Scoot, and the feed that Tiger provides to Scoot, is important for the long-term success of both carriers, and for the all-important development of the Singapore hub."
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