P&O; Princess Cruises balked Monday at a sweetened takeover bid by Carnival Corp., the world's biggest cruise ship operator, saying the $5-billion offer was still too low and likely to run into regulatory obstacles.
Princess insisted it would stay on course with its own plan to merge with rival Royal Caribbean Cruises.
After Princess turned down its original bid, Miami-based Carnival followed up Thursday with a revised cash-and-stock offer valued at 12% more. Carnival is eager to break up Princess' planned merger with Royal Caribbean, which would create a $6-billion business that would sink Carnival as market leader.
"We made it clear when Carnival made its initial proposal that our response was based on two simple criteria--value for our shareholders and deliverability. The revised proposal still falls short on value and adds nothing on deliverability," Princess Chief Executive Peter Ratcliffe said.
Princess said it has no intention of meeting with Carnival to discuss the offer. It has called a shareholders' meeting Feb. 14 to consider the proposed merger with Royal Caribbean, despite Carnival's request that the meeting be canceled.
Princess, based in London, ranks third in its share of the cruise market. A tie-up with Miami-based Royal Caribbean would form a fleet of 41 ships and 75,000 berths.
Princess would own 50.7% of the new group--or $3 billion of its total equity value--with Royal Caribbean taking the remaining 49.3%.
Princess shares were down 99 cents at $23.17 on the New York Stock Exchange Friday. Carnival, which also trades on the NYSE, fell 41 cents at $26.05 Friday.
Their planned union triggered Carnival's initial bid, as all three companies struggle to cut costs in the wake of slowing business after the Sept. 11 terrorist attacks.
Princess said Carnival failed to specify any strategic logic for the buyout, and it complained that Carnival's offers were laden with "particularly troubling" regulatory and financial preconditions.
Princess also challenged Carnival's claim that a planned acquisition would be no more likely to encounter opposition from anti-competition watchdogs than would a merger of Princess and Royal Caribbean.