Princess again snubs Carnival

February 8, 2002 Posted: 1724 GMT

NEW YORK (CNN/Money) -- The board of P&O Princess Cruises PLC again rejected Carnival Corp.'s newly sweetened bid of $5.4 billion Friday and will continue to back its Royal Caribbean Cruises Ltd. merger.

The P&O board said Carnival's revised offer represents for the first time a realistic bid for those shareholders who want to cash out of the company and the industry.

Miami-based Carnival (CCL: up $0.34 to $26.01, Research, Estimates) raised its hostile bid for P&O Princess Thursday from its previous $5.02 billion. Carnival, the world's largest cruise operator, is trying to scuttle a $7.04 billion merger between Princess and Royal Caribbean, the second- and third-largest global players.

Carnival made its newest offer with one week to spare. P&O Princess shareholders (POC: down $0.34 to $23.27, Research, Estimates) are due to vote on the merger with Miami-based Royal Caribbean (RCL: down $0.24 to $17.06, Research, Estimates) at an extraordinary general meeting Feb. 14.

P&O Princess, in rejecting Carnival's fourth and latest bid, said Carnival has made no change to its offer in terms of deliverability. P&O Princess again recommended that shareholders vote in favor of the Royal Caribbean merger at the meeting next week.

"Carnival has nothing at stake here and therefore has no downside," P&O Princess CEO Peter Ratcliffe said. "We, on the other hand, have a valuable transaction that could be put at risk."

Carnival's bid requires that regulatory clearances be "on terms satisfactory to Carnival" which gives the world's largest cruise operator wide discretion as to whether proceed.

There also is no commitment on Carnival's part to meet any conditions imposed or resolve issues raised by the various regulators, P&O Princess said.

Carnival also has nothing to lose in its hostile offer. Whether or not it breaks up the  merger with Royal Caribbean and completes a takeover of P&O Princess, Carnival still will be the world's largest cruise ship operator, the company said.