SINGAPORE (Dec 21): Singapore Airlines has responded to an open letter by the Securities Investors Association Singapore (SIAS) on Dec 18, relating to the voluntary conditional general offer for Tiger Airways which closes on Dec 28.

SIAS had asked SIA to revise its buyout offer and extend the deadline for acceptance by two weeks, noting that SIA had previously paid 67.8 cents per share for Temasek Holdings’s stake in Tiger Airways, and paid 56.5 cents per share to increase its stake from 40% to 55.8%.

SIA says the independent financial adviser appointed by Tiger Airways to evaluate the offer has stated that the financial terms of the offer are “fair and reasonable”. It adds that Tiger Airway’s independent directors and the majority of analysts covering Tiger Airways have recommended that shareholders accept the offer.

SIA says it believes the offer of 41 cents is compelling as it is a premium of between 32% and 42% of the last traded price, as well as the one-month and three-month volume-weighted average prices of Tiger Airways. The IFA report also noted that the offer price also represented a premium of 42.5% of the average share price target estimates of research brokers a day before the announcement of the offer.

SIA closed 0.54% higher at $11.10, while Tigerair ended flat at 41 cents last Friday.