Exactly one month to the day that P&O Princess and Royal Caribbean Cruise Lines announced that they would merge to form a $6 billion cruise corporation, Micky Arison's powerhouse Carnival Corp. approached P&O with a $4.59 billion proposal. As reported in today's Wall Street Journal, P&O Princess, which initially rejected Carnival's offer, has now reconsidered and is currently weighing all its options of a possible merger with the "world's largest cruise line," - quite possibly leaving Royal Caribbean hanging out to dry.
Despite these new developments, Royal Caribbean still stands firmly on its initial agreement with P&O Princess, according to Richard Fain, RCCL's chairman and CEO. Fain, who doesn't seem to be losoing sleep over Princess' decision to postpone its key shareholder meeting, released a statement confirming his staunch beliefs of RCP Lines: "Royal Caribbean supports P&O Princess' decision to postpone their EGM, in order to give shareholders time to fully consider their alternatives. I am convinced that the merger we have with P&O Princess will provide both sets of shareholders the greatest long term value going forward, and the P&O Princess shareholders will recognize that the transaction with Royal Caribbean is superior in all respects to the takeover proposal from Carnival."
Originally, a possible merger between Princess and Carnival was considered out of the question by the line's CEO, Peter Ratcliffe, because of anti-trust issues that could arise. It seems however though, that Ratcliffe and P&O may have a change of heart - that is if Arison makes them an offer they can't refuse.