P&O Princess accepts revised $5.4 billion buyout offer from Carnival

<br>LONDON (AP) _ P&O Princess Cruises PLC accepted a sweetened $5.4 billion takeover offer from Carnival Corp., signaling that months of jockeying by the world's top three cruise companies might be

Friday, October 25th 2002, 12:00 am

By: News On 6

LONDON (AP) _ P&O Princess Cruises PLC accepted a sweetened $5.4 billion takeover offer from Carnival Corp., signaling that months of jockeying by the world's top three cruise companies might be nearing an end.

P&O Princess spent much of the past year fighting off Carnival's approaches after agreeing to a ``merger of equals'' with rival U.S. cruise company, Royal Caribbean Cruises Ltd.

But P&O Princess chief executive Peter Ratcliffe said his company's board had decided Miami-based Carnival's latest offer was ``financially superior'' and that it was withdrawing support for the Royal Caribbean deal.

The deal will create a powerful new company listed in both London and New York _ Carnival is the world's biggest cruise operator and P&O Princess the third. Royal Caribbean is ranked No. 2.

The Carnival offer values P&O Princess at $5.4 billion, up from its earlier bid of $5 billion.

Carnival made the offer on the condition that P&O Princess withdraw its recommendation of the Royal Caribbean deal within 48 hours and that P&O Princess recommend the Carnival bid to shareholders by Jan. 10.

Richard Fain, Royal Caribbean chairman and chief executive, said the decision by P&O Princess to agree with the conditions was regrettable. P&O Princess first revealed in November 2001 that it had agreed to a deal with Royal Caribbean.

Princess must pay Royal Caribbean a $62.5 million penalty as the price for breaking off their merger plans.

Ratcliffe said the combined group was likely to be called Carnival in both the United States and Britain but that the P&O Princess name was unlikely disappear completely.

He said he didn't expect the takeover to result in the loss of a significant number of jobs.

``There are 7 million people cruising in the U.S., and I believe there's still a lot of growth there. But what's more exciting is that in the rest of the world, people are only starting to discover cruising,'' he said.

P&O Princess employs around 20,000 people worldwide and sails under the brands P&O Cruises, Swan Hellenic and Ocean Village.