Carnival raises hostile offer for P&O Princess to $5.4 billion

MIAMI - Refusing to take no for an answer, Carnival Corp. came up Thursday with its fourth hostile offer for P&O Princess PLC in an effort to prevent P&O from merging with Royal Caribbean Cruises Ltd. <br> <br> The $5.4 billion offer requires 15 percent of P&O shareholders to pledge by Friday to vote for an indefinite delay of the merger when the issue arises on Feb. 14. If 15 percent don&#39;t come forward, the offer reverts to a rejected $5.1 billion bid. <br> <br> Royal Caribbean and P&O had no immediate response. <br> <br> A Royal Caribbean-P&O merger would put together the industry&#39;s No. 2 and No. 3 cruise lines and displace Carnival as the industry leader. <br> <br> Carnival wants shareholders to put off the vote at least four to six months until regulatory review on both sides of the Atlantic is complete. <br> <br> &#34;Why vote on something that hasn&#39;t cleared all of the hurdles?&#34; asked Carnival spokesman Tim Gallagher. &#34;We don&#39;t think the shareholders have been given the freedom to choose by their board at this point.&#34; <br> <br> By regulatory order, this is Carnival&#39;s final offer before the vote unless Royal Caribbean and P&O change their plans. <br> <br> Executives with Carnival, the world&#39;s largest cruise line, have been on the road since late last week wooing U.S. and British shareholders. <br> <br> Felicia Kantor, cruise analyst with Lehman Brothers, said the new offer could be enough to persuade P&O shareholders to put off the vote. <br> <br> &#34;We believe this offer will be the catalyst to push many POC shareholders over the fence,&#34; she said. <br> <br> Carnival got involved after London-based Princess announced its proposed union with Royal Caribbean in November. The suitors are crosstown rivals in Miami. <br> <br> With the proposed merger, Princess would own 50.7 percent of the new group -- or $3 billion of its total equity value -- with Royal Caribbean taking the rest. <br> <br> All three companies are eager to cut costs after business plunged in the wake of the Sept. 11 terrorist attacks. <br> <br> Carnival is offering 0.3004 of a share for each P&O share based on its closing price Wednesday of $25.86 on the New York Stock Exchange and an exchange rate of $1 to 0.708 pounds. <br> <br> Shares of Carnival fell 26 cents at midday, while Royal Caribbean was up 20 cents to $17.70, and Princess&#39; U.S.-traded shares were up 18 cents to $23.28. <br> <br> <br>

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