Singapore Airlines is offering Tiger Airways shareholders the Offer Price of S$0.41 per Tiger Airways share in cash, as well as an option to subscribe for Singapore Airlines shares at S$11.1043 per share.
Singapore Airlines currently owns 55.8 percent of Tiger Airways.
"SIA's objective for the offer is to derive enhanced commercial and operational synergies through a full integration of Tiger Airways into the SIA Group. SIA believes the offer will benefit shareholders of both Tiger Airways and SIA," Singapore Airlines said in a statement.
The offer price represents a premium of 32 percent, 35 percent, and 42 percent respectively over the last traded price, the one-month and 3-month volume weighted average prices (VWAP) of Tiger Airways shares, Singapore Airlines said.
In a note, analysts at OCBC urged investors to take advantage of SIA's offer.
"The share price over the last 52 weeks traded nowhere near the offer price," Eugene Chua, an analyst at OCBC, said in a note Friday, noting the stock's highest level over the past 12 months was only 36.5 Singapore cents. "We recommend investors to ACCEPT THE OFFER." The emphasis was Chua's.
The offer is conditional upon Singapore Airlines and parties acting in concert with with it owning more than 90 per cent by the close of the offer. Singapore Airlines will fund the offer through internal cash resources.