Carnival ups bid for Princess

AMERICAN cruise giant Carnival today threw down the gauntlet to P&O Princess shareholders, upping its takeover offer but demanding they call for the deferment of a vote on the British group's merger with Royal Caribbean.

Carnival said it would lift its hostile bid to £3.8bn from £3.6bn. But it insisted that shareholders accounting for 15% of Princess must ask for next Thursday's vote to be delayed until regulators rule on the two merger and takeover proposals.

In a ratcheting-up of the decision making process, it set shareholders a deadline of 1pm on Friday. Fund managers were considering their options but M&G, which holds about 3%, said it would call for an adjournment.

One investor, who refused to be named, said: 'The situation is very complex. It would be far easier to judge these two offers side by side when we know where we stand with the regulatory position.'

Carnival chairman Micky Arison, who has spent this week in the City visiting investors, is likely already to have had tacit agreement from investors to play ball.

The increased offer, to be funded entirely in Carnival stock, values Princess at 550p a share. A Princess spokesman said: 'The board will meet, consider and take appropriate action in favour of shareholders.'

For the vote to be delayed, at least 50% of shareholders must call for an adjournment. Carnival wants an early indication that there is a good chance of that happening.

Princess has claimed all along that such a move would drive Royal Caribbean away from the negotiating table, meaning investors ran the risk of losing an agreed deal. However, it recently admitted that Royal would probably not be legally entitled to walk away merely because shareholders were considering another offer.

The regulatory process is far from certain on either combination, as the three companies already make up the top three players in the world.

Carnival's latest offer would see Princess shareholders taking 0.3004 Carnival shares for each Princess share. The US group would also assume $1.4bn (£1bn) of debt. The lack of cash in the offer may put off the bid target's directors.

Princess shares rose 6 1/2p to 409 1/2p, having wallowed at 180p before the bid process started.

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