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Bidding war looms over cruise line

Executives of P&O Princess Cruises don't think Carnival's offer to take over the cruise line is as good as a merger deal already struck with Norwegian-founded Royal Caribbean Cruises. Rival Carnival sweetened its bid for P%O Princess late last week.

Now the stage looks set for a bidding war over P&O Princess, with the winner emerging as the largest cruise line in the world.

The Norwegian owners who hold a major stake in Royal Caribbean, and who would remain key shareholders in a merged line with P&O Princess, may get pushed overboard. But Arne and Gjert Wilhelmsen, who were among the founders of Royal Caribbean, aren't giving up.

They have the management and board of P&O Princess on their side, after first announcing their merger plans in a friendly deal last November, and all are poised to fight to retain control of a combined 42-ship fleet.

Carnival, which long has ranked as the world's largest cruise line, apparently felt threatened by the pending P&O-Royal Caribbean marriage and made a rival bid in December. Late last week the bid was sweetened to include cash and 0.138 Carnival shares for every P&O share. Anaylsts value the new bid at about NOK 45 billion (USD 5 billion).

In addition to its own ships sailing under the Carnival name, Carnival owns Holland America Line and Cunard Line along with Seabourn, Costa and Windstar Cruises.

Some P&O shareholders have greeted Carnival's sweetened bid with a yawn, while others now think it's worthwhile to enter talks with Carnival boss Micky Arison