P&O deal cruising into final strait

THE ten-month battle for control of luxury cruise line P&O Princess is entering its final leg as US authorities decide whether rivals Carnival and Royal Caribbean can press ahead with their takeover bids.

But longer term there are growing concerns over the strength of the cruise business. An Iraq war would hit tourism and raise oil prices, imposing greater cost strains. New ships are due to enter service, lifting capacity at a time when shipowners are struggling to fill berths.

US brokers believe both bidders will be cleared and Carnival will win - though it may have to sweeten its £3.3bn offer. P&O rose 9p to 463p, against 180p before hostilities began.

P&O chief Lord Sterling, who favoured a friendly deal with Royal, was forced on the back foot when Carnival's aggressive Florida-based billionaire boss Micky Arison launched his hostile offer.

In Harwich recently, Arison thought it 'less than 50-50' that the US Federal Trade Commission would wave the bids through because of competition worries. But there are signs that he was too pessimistic and brokers say it is ready to clear both offers any day.