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Proposed Celebrity Merger Attracts Rival Bid Royal Caribbean offer for Celebrity sparks rival bid from Carnival Princess Cruises reportedly mulling its options On June 17, Royal Caribbean International (RCI) and Overseas Shipholding Group/Chandris Group interest Celebrity Cruise Lines Inc. announced an agree- ment to merge the two companies. The value of the transaction is $1.3 billion, and the combination of the two cruise lines would result in an fleet of 20 ships, including five on order. "Together, the two brands will enable us to deploy vessels and attract customers on an increas- ingly global basis, as well as pro- vide opportunities to achieve Presenting Cover Guard™ Flame Retardant Temporary Protection Systems by Bainbridge International. Cover Guard is used to protect cruise liners, ferries, naval ships, luxury yachts, coast guard, research vessels and all other types of working ship during the repair and newbuilding stages. It is available in several widths and thicknesses offering short or long term temporary protection against workman activity, dirt and debris to prevent soiling and damage to finished surfaces during the outfitting period. Reducing the risk of fire, smoke and toxicity within the marine industry is of paramount importance. Cover Guard has been specifically developed to reduce these risks, having been approved and recommended by most major international marine organizations. Illustrated here it is protecting the carpets and finished surfaces aboard the newbuilding E31 Rhapsody of the Seas for Royal Caribbean Cruise Lines at the Chantiers De L'Atlantique, courtesy of the French outfitters Erbos located in Nantes. The Cover Guard system has been tested and proven to be one of the most competitive and practical solutions in the market place. Bainbridge International Ltd. Brockhurst Park, Stoke Poges, Slough, Berks, SL2 4AF, England Tel: +44 (0) 1753 645323 / 642577 Fax: +44 (0) 1753 645575 Bainbridge International Inc. 255 Revere Street, Canton, Massachusetts, 02021-2960, USA Tel: +1 617 821 2600 Fax: +1 617 821 2609 4 BAINBRIDGE INTERNATIONAL Circle 325 on Reader Service Card greater economies of scale," said Royal Caribbean CEO Richard Fain. RCI would reportedly main- tain the Celebrity brand, in order to allow each entity to maximize its respective strengths. The total transaction calls for a purchase price for the equity of approximately $500 million and the assumption of approximately $800 million in debt. The pur- chase price will be paid by a com- bination of $230 million in cash and the issuance of 7.4 million shares of RCI common stock. The transaction is subject to due dili- gence, board approvals and the execution of definitive agreements. The merger plot thickened six days later, when RCI rival Carnival made a $525 million bid for Celebrity. Carnival offered the funds in cash or in cash and stock. Speculations regarding Princess Cruises' interest in acquiring Celebrity hit the news wires a few days later. At press time, Celebrity had reportedly not replied to rival bids of any kind. On June 19, Standard & Poor's affirmed Overseas Shipholding Group's triple-'B'-minus corporate credit rating and senior unsecured debt rating. The company said that with approximately $1.2 bil- lion of debt, proceeds from the Celebrity sale would improve cred- it measures only modestly. Carnival Completes Joint Tender Offer For Costa Cruises Together with Airtours pic, Carnival Corp. completed the joint tender offer for Costa Crociere S.p.A. on June 10. With the shares owned by II Ponte, a holding com- pany which Carnival and Airtours will purchase from the Costa fami- ly, Carnival and Airtours will own 98.2 percent of the ordinary share capital, 93.1 percent of the savings shares, 46.8 percent of the savings shares warrants and 82 percent of the total issued share capital of Costa Crociere on a fully diluted basis. The total cost of the securi- ties acquired in the tender offer by Carnival and Airtours is approxi- mately $275 million. 22 Maritime Reporter/Engineering News
