Micky Arison, billionaire CEO of Carnival, the world¿s largest cruise line, will this week make one final bid to torpedo the £4.8 billion merger agreement between two smaller rivals - Royal Caribbean and P&O Princess, according to London paper Sunday Times. Arison is this weekend working on ways to increase his cash-and-shares offer for P&O Princess from 500 pence to more than 525 pence per share. This would value the company at nearly £3.7 billion. However, the new offer is likely to include a caveat and Arison will need to seek clearance from the Takeover Panel for it to be allowed.
The Arison family controls Carnival with 47%, while Royal Caribbean is controlled by the Ofer and Pritzker families. 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.
Carnival is concerned about the financial liabilities that could result from unwinding a complex European cruise-ship joint venture between P&O and Royal Caribbean. The new bid will be conditional on Carnival being provided with a clear explanation of whether Royal Caribbean could mount a claim in the American courts if this joint company were unwound. P&O is in charge of the venture's bookings, but there is speculation that Royal Caribbean could take action if its partner deliberately missed preset benchmarks. Under New York law, P&O has a "duty of best endeavour" to meet the targets.
In a candid interview last week, Arison admitted that he had only a 5% to 10% chance of acquiring P&O, but analysts said if the new offer were pitched high enough, it could tempt P&O investors to delay an emergency meeting, scheduled for Valentine's Day.
P&O investors are due to approve the merger with Royal Caribbean at the meeting, but if Carnival¿s counter-offer is credible, they could delay a vote until after the two deals have been approved or rejected by European and American regulators.
Arison believes Carnival has an equal chance of securing regulatory approval. He said: "P&O Princess shareholders should not allow their board to mislead them on the regulatory issues. There is no discernable difference in the regulatory analysis of either transaction, particularly since both transactions will be reviewed on the same market definition."