Fight for Princess continues: Carnival to drop conditions in $3.1 billion bid

London's "Observer" reports that Carnival's management protested the high kill fee in the Royal-Princess merger agreement
Publish date:

London's Observer reported today that Carnival Cruise Lines, controlled by the Arison family, is dropping some of the conditions it had put on its counterbid for P&O Princess Cruises. P&O recently announced plans to merge with Royal Caribbean, in which the Ofer family holds a significant stake.

The Ofer family also controls the Tel Aviv-listed companies Bank Mizrahi and Israel Corporation. The Arisons are also deeply invested in Israel, with holdings in Bank Hapoalim, Housing & Construction, and the Eurocom telecoms company.

P&O rejected the Carnival offer, claiming conditions of the deal make it less attractive than the merger already signed with Royal Caribbean. P&O's advisers point out that Carnival has not even committed itself to an offer if all the conditions are met.

Carnival, for its part, protested the $62.5 million kill fee in the Royal-Princess agreement, as well as a $200 million cost of unwinding a concurrent joint venture agreement. Carnival claims Princess knew of Carnival's interest before writing the poison pill clause.

P&O CEO Peter Ratcliffe admits Carnival contacted him in September to ask whether he was interested in some form of merger or co-operation, but says that call "was not a takeover approach".

P&O has, however, delayed the meeting for shareholders to consider the Merger with Royal Caribbean from mid-January until 14 February - believed to be the latest date for putting it to a vote. It has given Carnival until 18 January to come up with an unconditional offer.