Princess in spin over Carnival

INVESTORS in P&O Princess deserve a long cruise to recover from the takeover saga surrounding their company. Carnival, the US giant attempting to break up Princess's merger with rival Royal Caribbean, has raised its hostile offer from 500p to 515p a share, or £3.6bn.

But if Princess shareholders have trouble navigating their way through the thickening mist it is no surprise. On the basis that a rising tide lifts all boats, Carnival is using the increases in its own share price to flatter its revised offer.

The technical terms of the bid remain much the same, although Carnival boss Micky Arison is stripping out many of the conditions of his two earlier offers. He has restructured the terms to avoid triggering poison pill payments attached to a joint venture between Princess and Royal.

But Carnival will still require assurance that the bid will get regulatory clearance before going ahead. All this means it would be 2003 before investors got cash.

Princess was unimpressed, and promised a response 'in due course'. Its planned merger with Royal faces an inquiry by UK competition authorities.

Carnival wants Princess to adjourn an extraordinary general meeting on 14 February called to approve the Royal deal. Arison insists the merger will destroy shareholder value and allow Royal to 'take advantage of P&O's relative financial strength'.