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Partner to Buy Cruise Line, Thwarting Carnival’s Offer

From Reuters

A partner in Royal Admiral Cruises Ltd. said Wednesday that he will exercise an option to buy the large cruise line holding company and block Carnival Cruise Lines Inc.'s $550-million agreement to take a controlling stake.

Miami-based Royal Admiral, which owns eight ships, says it is the world’s largest cruise line based on the number of berths. It operates Royal Caribbean and Admiral Cruise Lines and its fleet includes the new Sovereign of the Seas, the world’s largest cruise ship.

In August, Carnival Cruise, also a leading cruise ship operator, agreed to buy 70% of the holding company for $550 million in cash. The agreement was with Gotaas-Larsen Shipping Corp., I. M. Skaugen A/S, Jonnson Line AB and EFFOA-Finland Steamship Co.

However, another partner in the holding company, Anders Wilhelmsen & Co. A/S, has a “right of first refusal” under which it can buy the other partners’ stakes if it can match the Carnival offer by Oct. 10.

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Arne Wilhelmsen, chairman of the Oslo-based shipping company, said in a statement issued in Oslo and New York on Wednesday that he would exercise that option and he had the money to match the Carnival offer. Wilhelmsen said he has arranged for financing for the purchase through Christiania Bank of Kreditkasse and Bank of Nova Scotia.

A spokesman for Miami-based Carnival said Carnival had been notified of Wilhelmsen’s statement but had not yet received any other information. He said he could not yet comment on what effect this would have on the planned acquisition.

However, Wilhelmsen said his action would end Carnival’s agreement. “This now puts an end to months of speculation as to the future ownership of the world’s largest cruise line, including a recent offer from Carnival Cruise Lines Inc. for 70% of the stock,” he said.

Pritzkers Decline Comment

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A spokesman for Wilhelmsen in Miami said the company was also negotiating a joint venture with the wealthy Pritzker family, in which the Pritzkers would obtain a 50% stake in Royal Admiral.

“A cooperation with the Pritzkers would also provide us with exceptional opportunity for further strengthening of our market position,” Wilhelmsen said in the statement.

A Chicago spokeswoman for the Pritzkers, whose holdings include the Hyatt hotel chain, would not comment.

Richard Fain, chairman and chief executive of Royal Admiral Cruises, said that to his knowledge the only thing that could stop Wilhelmsen from taking over the line would be insufficient funds.

“As far as I understand it, he’s legally committed to buy the company at that price,” Fain said. “He does have to come up with the cash.”

Fain said that because Wilhelmsen gave official notice Wednesday that he was exercising first refusal rights, he now has 30 days to close the deal.


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