Singapore Airlines (SIA) has announced in a press release that it is launching a voluntary conditional general offer for all the shares of Tiger Airways that it does not already own.
SIA, who currently owns 55.8 percent of Tiger Airways, plans to delist and privatize the budget airline through the offer.
SIA said in the press release that they plan to develop enhanced commercial and operational synergies with the offer.
The airline plans to achieve all these by fully integrating Tiger Airways into the SIA Group.
Goh Choon Phong, the CEO of SIA, said in the press release that the offer shows the airline has a "long-term success" plan for Tiger Airways.
"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," he said.
Rapid News Network adds that SIA's airlines have carried a total of 15.04 million passengers in the first half of 2015 up 1.4 percent year-on-year.
Load factors have averaged 80 percent, which is half a percentage point up from the previous year.
Rapid News Network adds that SIA has been increasing the cooperation among its subsidies in areas such as scheduling and mileage services.
Goh, though, has ruled out a merger between Scoot and Tiger Airways at this time.
Under the terms of the agreement, SIA is offering 0.41 Singaporean dollars in cash to Tiger Airways shareholders for each share they own, according to the press release.
The company is also offering an option to subscribe to SIA shares for 11.1043 Singaporean dollars per SIA share.
SIA adds in the press release that the option to subscribe to SIA shares is exercisable at any time during a 15 Market Day period.
SIA will announce the date on which the option will commence after the final settlement date for all of the Offer Shares validly tendered.
SIA will need to secure 90 percent of Tiger Airways at the close of the offer period for the deal to go through, according to the press release.
SIA has valued Tiger Airways at approximately 1.02 billion Singaporean dollars with the offer price.
