A little slow to the boat, as I have only been a curious onlooker to the whole SIA-Tigerair takeover affair thus far. SIA made a 41 cents offer on 5^th November to privatise Tigerair, a 32.3% premium to the budget carrier’s 31 cents closing price. This Wednesday, the Straits Times published an article, “SIA offer for Tigerair ‘not reasonable’, says SIAS”. While I value the work that SIAS does for minority shareholders, I respectfully disagree with the arguments raised by SIAS president and chief executive David Gerald in the article.

Anchoring bias and sunk cost

The 2 main arguments of SIAS are as follows:

SIA bought out Temasek’s 7% stake in Tiger Airways at $0.678 (Temasek owns 57% of SIA). Minority shareholders also approved a whitewash waiver for SIA in 2013 to allow SIA to become controlling shareholder without making a mandatory general offer. At ...

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