Carnival bid faces rough US seas

HAS Carnival rammed the European Commission amid ships? Until recently, it looked as if Competition Commissioner Mario Monti planned to scupper the US cruise line's bid for P&O Princess unless it made major disposals.

But now the Commission has changed its tune and seems willing to let Carnival's bid through on the nod. Why the change of heart? Most observers think the recent legal defeat Monti suffered at the hands of MyTravel, the former Airtours, prompted him to change his mind to avoid the risk of a further legal challenge.

His courage apparently came unstuck when Micky Arison, Carnival's assertive chairman, suggested the Commission might face another lawsuit if it blocked his bid. Monti's fig leaf for the volte-face is that he is falling behind the relatively relaxed view the British authorities took of the cruise market when they cleared Royal Caribbean's rival bid for Princess this year.

The decision, which may be announced this week, is on the face of it good news for Princess shareholders. They still have two bids to consider rather than just one. But the biggest regulatory hurdle is yet to come in the US. It is far from clear that the regulators there will fall behind Monti and nod both deals through.

They have their own Airtours experience to brood on: the GEHoneywell case. Add to this the fact that Royal Caribbean will doubtless be lobbying at full tilt against Carnival.

Its biggest nightmare would be if Arison won the day. Carnival may have seen off Monti, but Princess shareholders still face a long uncertain voyage before they get the auction they crave.

C & W still waiting for upturn

CABLE & Wireless shareholders are tired of hearing the data carrier will be the last man standing after its weaker rivals fall. 'Will I still be alive when the upturn comes?'one investor reportedly asked at this month's annual meeting.

Until recently, only tiddling data carriers were going bust, leaving scraps of business for the big boys to fight over. Moreover, many bankrupt carriers managed to recapitalise themselves or flog their assets to rivals. In the past fortnight, however, things have changed.

Take WorldCom, one of the world's biggest data carriers. Customers are deserting it. Bankrupt KPNQwest has closed part of its network and the assets it is selling are destined mainly for incumbent operators that may price capacity more rationally.

Should investors follow the lead of Warren Buffett, who has just ploughed $100m (£63m) into Level 3 of the US? They must tread carefully. Bandwidth prices have probably benefited from the collapse of companies supplying at below-cost prices. Corporate demand for telecoms capacity may remain weak for some time. Cable & Wireless may find it easier to win business. But it needs a rocket under its profit margins to deliver worthwhile returns.

Music silenced

THE music has stopped for rock-and-roll chief execs. In their stead arrive the 'safe hands' of former civil servants and retired corporate chieftains.

Vivendi's Jean-Marie Messier was first to go - replaced by dour civil servant Jean-RenÈ Fourtou. Then last week a 71-year-old economics professor replaced Ron Sommer, the mathematics whiz, at Deutsche Telekom and AOL Time Warner whisked chief operating officer Robert Pittman, founder of MTV, out of the door, handing full control to its chief executive, a former savings-and-loan executive.

Finally, Abbey National's Ian Harley departed on Friday after failed attempts to swap the bank's beat from waltz to hip-hop. This new rhythm in boardrooms is music to shareholders' ears.