Here's news story about a possible combination between Carnival Cruise Lines and P&O/Princess. However, Royal Caribbean would like to combine with Princess too. It's likely that some consolidation in the cruise ship sector is coming. Maybe some new "wet chips" to look for in the future?
------------------------------

P&O Princess, Carnival May Both Face Shareholder Pressure
December 18, 2001

NEW YORK -- Carnival Corp. bypassed P&O Princess Cruises PLC to appeal directly to shareholders
to accept its hostile bid, which could put pressure on both companies to sweeten their deals.

After Carnival (CCL) made its $6 billion hostile takeover bid Sunday, the London cruise line promptly turned it down
and said it would continue to complete a merger with Royal Caribbean Cruise Lines Ltd. (RCL). That merger of equals
offers no premium while Carnival's offer values P&O Princess at about $26.35 per American depositary shares, or
about a 25% premium, to the Dec. 14 close of $21.04, said Deutsche Banc Alex. Brown Inc. analyst Michelle Russo.
She noted in a research note that $2 billion of the $4.61 billion offer from Carnival is cash.

In 4 p.m. New York Stock Exchange composite trading, Royal Caribbean stock fell 12% to $14.42. P&O Princess stock,
meanwhile, jumped 6% to $22.23 on news of its newest suitor. Carnival shares fell 1.7% to $26.83.

P&O Princess (POC) holders will probably push Carnival to increase the price of its offer while nudging P&O to
renegotiate its deal with Royal Caribbean, Ms. Russo said.

P&O Princess said teaming with Carnival would offer greater regulatory risk and fewer benefits than one with Royal
Caribbean, adding that Carnival's bid isn't a formal offer because it depends on the companies getting prior regulatory
approval.

Carnival's bid could upset Royal Caribbean's move to become the No. 1 player in the industry. If regulators reject both
deals, Royal Caribbean would remain No. 2. If regulators approve both mergers, P&O Princess shareholders could opt
for Carnival, leaving Royal Caribbean at sea.

While a combination of Royal Caribbean and P&O Princess would have 41 ships and 75,00 berths, Carnival and P&O
Princess would have 62 ships and 87,020 berths. Either combination would create the world's largest cruise line and
could face regulatory trouble in the U.S. and United Kingdom if market-share control were based on cruise-line
industry, said David Leibowitz, a managing director at Burnham Securities.
(details continue in full story)