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Princess rebuffs Carnival offer
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February 4, 2002: 12:18 p.m. ET
No. 3 global cruise operator sticks with Royal Caribbean $7.04 billion merger.
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NEW YORK (CNN/Money) - The board of P&O Princess Cruises PLC rejected a revised $5.02 billion takeover offer from Carnival Corp. Monday, and is sticking with a $7.04 billion merger agreement with Royal Caribbean Cruises Ltd.
The Princess board said Carnival's offer of 509 pence ($7.16) a share is not as favorable financially for its shareholders and is less likely to be completed than the merger with Miami-based Royal Caribbean (RCL: down $0.42 to $17.76, Research, Estimates).
Carnival, the world's largest cruise operator, is trying to wreck a merger between Royal Caribbean and P&O Princess (POC: down $0.25 to $23.00, Research, Estimates) -- the second- and third-largest global players, worth around $7.4 billion.
Miami-based Carnival (CCL: down $0.50 to $26.38, Research, Estimates) bid $4.5 billion in December for P&O Princess, and then sweetened it to $5 billion on January 17. Princess's board rejected both.
On Jan. 30, Carnival then changed its $5.02 billion offer from part-share and part-cash to an all-share bid. Princess is now rebuffing that offer as well. Carnival shares are not included in the Financial Times-Stock Exchange U.K. indexes, Princess reasoned. So unless Princess shareholders could retain Carnival shares, they would be cashing out and not able to participate in future growth.
"The board continues to believe that the price offered by Carnival does not fairly reward shareholders for the value that would be created by Carnival and its shareholders from the integration of P&O Princess into Carnival," Princess said in a statement Monday.
Princess said that the Carnival offer has significant completion risk and is less likely to be delivered than the transaction with Royal Caribbean. 
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