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Carnival ups Princess bid
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February 7, 2002: 4:36 a.m. ET
But British cruise operator rejects latest offer of $5.4B from U.S. rival.
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LONDON (CNN) - Carnival, the world's biggest cruise ship operator, has again raised its hostile bid for P&O Princess Cruises in a final attempt to sink a merger with Royal Caribbean.
The latest offer values P&O Princess at 550 pence a share, or £3.8 billion pounds ($5.4 billion), Carnival said. The Miami-based company's last bid was valued at 515 pence a share.
P&O Princess has rejected Carnival's three previous offers, choosing instead to merge with Royal Caribbean.
Responding to Carnival's latest bid, Royal Caribbean Chairman and CEO Richard Fain said, "In my view, this latest [proposal] is no more real than the previous ones. Carnival's goal is to scuttle our meeting, secure in the knowledge that any price offered will never need to be paid."
A sharp downturn in tourism, exacerbated by the Sept. 11 attacks on the U.S., has driven cruise operators to seek alliances to cut costs, but P&O Princess said a deal with Carnival would meet massive regulatory obstacles and bring little value for shareholders.
Carnival CEO Micky Arison has been in London this week trying to drum up support among P&O Princess shareholders after the British company rejected its takeover offers.
But time is running out. P&O Princess shareholders are due to vote on the deal with Royal Caribbean at an extraordinary general meeting Feb. 14.
P&O Princess's proposed merger with Royal Caribbean was worth about £4.2 billion, or 318 pence a share, when it was announced in November.
If the original deal succeeds, P&O Princess would own 50.7 percent and Royal Caribbean would own 49.3 percent of the enlarged group, which would have a dually listed structure similar to oil producer Royal Dutch/Shell and mining firm BHP Billiton. There also is a breakup fee of $62.5 million if the deal does not proceed.
The combined group, based in Miami, Fla., would have a fleet of 41 ships and about 75,000 berths with leading positions in the Caribbean trade and destination trades, including Alaska, the Mediterranean, the Baltic and the Panama Canal.
Carnival said its offer is conditional on it receiving indications by 1:00 p.m. London time Friday that shareholders controlling at least 15 percent of P&O Princess will vote in favor of adjourning the British company's vote next week.
The UK Takeover Panel has informed Carnival it cannot raise its bid any further before the shareholder meeting, unless P&O and Royal Caribbean change the terms of their proposed merger. 
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